Credit Accounts?

Question

I have paid and closed all accounts but Two that have a small balance.I am considering closing the remaining two accounts.Will this affect my credit by not having open accounts

Answer 1

the way your credit is defined (broadly) as being good or bad is whether you pay your debts or not. people who have never had any accounts have no credit.

in order to demonstrate that you are able and willing to be paying your installments for future purchases you want to demonstrate a history of this behavior. to most lenders this is even more important than your income. your income is a factor mostly in how much they lend you; your paying behavior determines more whether or not they want to risk lending you and both combine to make up the interest rate and credit limit you get. another important factor is the ratio bw your limits and your balances - are you maxed out on all your cards or do you have a reasonable cushion in your accounts (clearly the second scenario is the better score).

so, yeah, it's good to have a couple of accounts with balances to pay off.

Answer 2

You need to keep at least one line of credit open, just to keep your credit status active. It looks better to be paying on something than not, I don't understand the way credit is rated. If you shop around to get the best price, every time your credit report is pulled, well for some reason that is more points off your credit.

Answer 3

YES! Part of your credit score (even though I dont' agree with it) is how much open credit you have.

So even through a person might have 15 open credit cards with no balance, I am under the impression that your credit score actually decreases because you no longer have as much open credit as you once did.

I'd keep 2-3 accounts open.

Answer 4

yes, you want to have a credit card and use it some of the time, just pay it off when you make a purchase. It will affect your rating if you close all your acc's. It's like this, your credit rating will look great with no dredit owing, but it will also look bad if you want to borrow credit, lets say for leverging as a bank or broker will see no credit history. I have a card with no annual interest and combined points with various companies and it also gives me money off of fule.