One more question...credit cards?

Question

If I have 3 major credit cards with pretty high credit limits....if I pay them down and don't buy much on them afterwards, does that lower my current higher credit score? Do credit scores 'get old' or drop after a period of time, due to little or no activity? Or does it just stay the same until something else affects it? Thanks...

Answer 1

To add to what was said. It's recommended that you do use your credit cards. Keep your balances low but use them. This does not mean go out there and go crazy but charge on them once in a while, make your normal payments ( normally will make the min plus) for about 6 months and pay them off or even consider transferring balances to the lowest interest card but again still use the others but not for large purchases. The result will be that you still have active accounts that will look are paid on time and that shows creditors that you can manage your finances as well they can make some money from you. Kinda a share the wealth type thing.

If you have credit card accounts with large credit limits available and they are paid off and you don't use the cards some creditors will close the accounts due to inactivity. They want you to use them so they can make money but they don't want you to abuse them so that they loose money. It's my understanding that the Ideal level to be at is to only use about %35 of your available revolving credit. I've been told that this is a big boost to your credit score. Mind you there are also debt to income ratios that are considered as well. If you have $150k of available credit but only earn $50K per year this can have a negative impact.

Anyway I hope this helps. Take care

Answer 2

Your credit score will most likely not go down, but keep in mind that creditors look at more than just your score. While that is something they see, they most often look at your DTI, or debt-to-income ratio, and with credit cards paid off that will be good. However, without a steady payment history of on-time payments, they will have a harder time deciding if you would be good for a long-term loan or another credit card. Not always the case, usually depends on the loan, but something to consider.

Answer 3

Credit scores never get dropped you always have 3 credit scores from the 3 major credit bureaus, Transunion, Experian, and Equifax, keep the balance low and pay on time, your credit score will improve. Good luck.