Is there a golden rule on what the best ratio is between available credit limits and credit used that will improve my credit score.
My credit score is good, since we always pay our bills on time. I decided to eliminate a bunch of dorment store credit cards and their available credit line. Now I am wondering if this will hurt my credit score, since it cut my available credit limit in half.
Any inteligent feedback is welcome.
2006-07-19 04:00:42 · 9 answers · asked by Avatar the last airbender 3 in Business & Finance ➔ Credit
Well, closing credit cards does lower your credit score for a time, I'm not sure how long. However, when you apply for any kind of loan they look at your available credit and then calculate your debt service ratio based on the assumption that everything is maxed out - which in turn can drastically lower the amount a bank is willing to give you.
2006-07-19 04:09:26 · answer #1 · answered by ? 6 · 4⤊ 0⤋
If you close a credit card account, make sure that you request a notation that it was closed at your request....otherwise, your credit can be damaged.
Your credit score is based on the percentage of available credit you are currently using, so you can lower your credit score by closing accounts.
However, you can balance this by doing the following:
1) any account you close, ask for the notation- closed by customer request.
2) don't charge any account up to or beyond the limit...try to keep a 20-50% available credit on any account...if you can, pay off the balance each month.
I make double payments on all my credit cards where I carry a balance (two payments a month instead of one). This ensures that I am always paying down the balance as well as covering the minimum.
2006-07-19 04:08:31 · answer #2 · answered by Elise M 2 · 0⤊ 0⤋
Leave the card open as length of your credit history is a major factor in determining your credit score - if you close this card and open a new one with no fees your oldest card when you apply for a mortgage in the next few months will only be as old as your open account.
2016-03-26 23:51:15 · answer #3 · answered by Anonymous · 0⤊ 0⤋
some people are going to say 35% or less but actually go for 25% or less of your credit amount since this ratio varies from credit card lender to credit card lender
2006-07-19 06:06:28 · answer #4 · answered by christiansareawesome 4 · 0⤊ 0⤋
For Credit and finance solutions I visit this website where you can find all the solutions. http://finance-solution.us/index.html?src=5YAWds13tGY73fDG1
RE :Credit card limits vs. credit used?
Is there a golden rule on what the best ratio is between available credit limits and credit used that will improve my credit score.
My credit score is good, since we always pay our bills on time. I decided to eliminate a bunch of dorment store credit cards and their available credit line. Now I am wondering if this will hurt my credit score, since it cut my available credit limit in half.
Any inteligent feedback is welcome.
Follow 8 answers
2017-04-04 23:56:18 · answer #5 · answered by ? 6 · 0⤊ 0⤋
I hate credit cards
2006-07-19 04:02:56 · answer #6 · answered by Justinfire 4 · 0⤊ 0⤋
it wont nec hurt but it doesn't help best to ask a credit counselor for a pro opinion or go to a site such as truecredit.com they give great tips there
2006-07-19 04:05:57 · answer #7 · answered by Amanda A 2 · 0⤊ 0⤋
if you dont use the cards, its better to just eliminate them than have the credit sitting out there open and unused.
2006-07-19 04:04:22 · answer #8 · answered by Kutekymmee 6 · 0⤊ 0⤋
no just keep the open accounts to < 50%
2006-07-19 04:04:34 · answer #9 · answered by golferwhoworks 7 · 0⤊ 0⤋