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I want to be able to purchase a home and get a loan in the future.
I am really trying not to ruin my credit. So i was wondereing if leaving a credit card open with no balance is a good idea. I have heard other places where that was a bad idea. thanks!

2006-12-01 05:01:40 · 9 answers · asked by Gemini2412 2 in Business & Finance Credit

9 answers

its a good idea to leave it open. it looks better when ppl pull up ur report to loan u money

2006-12-01 05:04:56 · answer #1 · answered by jenivive 6 · 0 0

Generally speaking, it's better to leave it open with no balance.

When looking at credit scores, there's a balance you need to find. The scoring systems want you to have some open access on your credit cards. They look at balance-to-limit ratios on individual accounts, and also at BTL ratios across your entire revolving (credit card) spectrum. So having a couple accounts that have a zero balance will lower your overall revolving usage compared to your overall limits.

That being said, if there's any cost associated with having the card sit open, like an annual fee, it may not be worth keeping.

They also look at the average length of time your accounts have been opened. So closing your oldest credit card in favor of a new card can actually hurt you quite a bit. First, you have a new inquiry which allowed you to get the card. Second, you have a new account, which will temporarily lower your credit rating until the system sees how you use it. Third, if you close out your old account, you've now cut out the time-length of that account from your age average. Triple-whammy against your credit rating.

Bottom line, don't let any of your cards exceed 50% of their available limit. Best to only use one account and leave the rest alone. Even better, use one, pay it off, leave it in a drawer for a month. Use a different card, pay it off, swap it in the drawer for the other one for a month. That way, the system will see that you pay off and leave zeroed, the amount you charge on your account. Typically a good booster to your scores.

2006-12-01 05:34:31 · answer #2 · answered by Anonymous · 0 0

often open is the best but if you are buying a house closing might be better because the credit limit counts against you as possible other debt. You might want to keep it open for the months you are saving for the down paymentt and then close it just before you apply for the home loan. You might even wait and see how credit approval goes and then take the lenders advice on when to close the account.
It might even be a good idea to just use it for buying auto gas and paying it off each month for a few months.
Usually you want to have several places where you have paid every month to establish a pattern of regularity in payments.
I would suggest you charge a set amount each month and set it up to be auto paid online. We have that set up on all out cards so there is always a minimum payment made and we manually add more as we can.
It is better to have had more credit and paid it as agreed than to not have much outstanding.
It is also good to keep open just in case you have some big unplanned expense, like the transmission going out and needing $2000 quick to pay the repair...


Allot depends on where you are at establishing your credit rating.
Most areas have some free consumer credit counseling they can give you the whys and why nots about this.
My daughter just took a course (adult Ed.) on home buying and getting their credit reports and doing things to improve them was part of the course. You might want to see if there is a course like that where you live. It gave her tons of info on the home buying process. She now knows how much the banks are likely to lend so now when she has time she can start looking for the "perfect" home..

2006-12-01 05:14:29 · answer #3 · answered by surfnsfree 5 · 0 0

Maybe, depends on the Credit Card company, the Credit Card,.. and so on.

I think that what I heard is a good way to boost your Credit is the have a Checking Account (with a Bank) [or was it a Saveings] and always have 20 dollars in it, but to keep adding 20 dollars each week I think it was. It was probably a Saveings. This increases your good Credit [I should say credit towards the good] if you can keep doing it for over a year.

2006-12-01 05:13:13 · answer #4 · answered by sailortinkitty 6 · 0 0

All the lenders I work with say to leave it open with no balance. It shows spending restraint and availability of creditworthiness. Also, never let a card go over 50% of the limit. If you do have some 0ver 50% ask for a higher credit line.
Good luck

2006-12-01 05:08:08 · answer #5 · answered by Anonymous · 0 0

You can leave it open just to have something to record on your credit report. The card company will no doubt charge you a monthly service fee, but it probably won't be that much. It'll be worth it just to have a credit card to reserve a hotel room etc. You should probably make at least one purchase a month, though, because companies will look at your credit reports and they want to see that you pay your bills on time. If they look and see no activity, they won't know how you are about paying bills.

2006-12-01 05:05:18 · answer #6 · answered by bodinibold 7 · 0 0

leave it open, but at least use it once a month and pay it off. Maybe buy groceries, then pay it offf.
Then get gas a few times, and pay it off.
If you have a card but no activity, it is basically the same as not having a card at all. You need to use it wisely and incurr on time payments in order to establish your credit.

2006-12-01 05:11:18 · answer #7 · answered by angie 5 · 0 0

having it open with no balance won't help your credit at all. but like 30 bucks on it or something small then pay the minimum every month. faithfulness is what creditors look at. if you do choose to leave it open with no balance, keep in mind that they may add your membership fee to that. and if you don't pay attention to it and pay it on time, then you will be hit with fees every month, and THAT will destroy your credit. hope this helps

2006-12-01 06:02:38 · answer #8 · answered by Starry Eyes 5 · 0 0

i WORK FOR ROYAL BANK AND YOU SHOULD JUST LEAVE YOU CARD OPEN WITH NO LIMIT. JUST KEEP PAYING YOUR BILL EACH MONTH (MINIMAL LIMIT) OR THEY WILL SHUT YOU DOWN THEMSELVES. GOOD LUCK

2006-12-01 05:10:29 · answer #9 · answered by celestialangel43 2 · 0 0

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