I heard this from my mother, who said she saw it on a news broadcast. I'm trying to establish a good credit line, and I was thinking about doing what everyone else does and charge two purchases, pay them off right away, and then cancel the card. But now the card companies can give you bad credit if you do that? I need to know if this is true or not. Can someone please point me in the direction I need to be in?
2007-03-21 13:30:17 · 7 answers · asked by Phoenix Masakari 1 in Business & Finance ➔ Credit
Getting a card, buying a couple things and then canceling the card, IS NOT going to get you good credit.
One of the things on your credit report is the credit you have. If you cancel the card, you won't have any credit so in reality, yes, that is lowering your score.
There's nothing really wrong with your plan until you get to the part about canceling the card. Keep the card open with a zero balance and it will help your score. Use it now and then and always pay the entire balance ON TIME and your score will go up.
2007-03-21 13:35:52 · answer #1 · answered by Faye H 6 · 4⤊ 0⤋
not as long as you pay the charge off. Just cancelling the card does not give you bad credit. If however you had a promotional interest rate, then you could loose that and the company can give you a higher rate.
I had never heard of making a couple purchases and then canceling the card. Just to build credit. If it works, maybe I'll try it.
If the credit card company asks you why you are canceling the card, make something up. Say you changed your mind, you got a better rate with another company, (be prepared if you say this) or just say you want to get out of debt and not back into it. I use that one a lot.
2007-03-21 13:32:41 · answer #2 · answered by Mrs J 6 · 0⤊ 0⤋
Do not cancel the card. Pay down the debt because credit bureaus look at how much of the credit line you keep used up (lowering your available credit) every month. If you have a $1,000 line of credit and it is always used to the max the credit bureau sees: available credit: zero, line of credit :$1,000. It looks as if you dont have the capacity to pay it back timely and that causes the lowering as well.
Closing an account lowers your score even more because it removes that $1,000 from your available credit entirely.
2007-03-21 13:37:01 · answer #3 · answered by loanquest 3 · 0⤊ 0⤋
No, not true, but you should hold on to the card anyway to build your credit. Charge a little each month for several months and pay it on time each month. This will build a good credit history much better than a one time charge and closed account.
2007-03-21 13:34:30 · answer #4 · answered by Brian G 6 · 1⤊ 1⤋
As long as your credit card payments are not delinquent you will not have bad credit. If you cancel a card, however, it may lower your credit score.
2007-03-21 13:33:27 · answer #5 · answered by Ti 7 · 3⤊ 0⤋
Recipe for credit success:
1. get a card
2. spend a little
3. pay in time
4. keep your card
2007-03-22 05:45:17 · answer #6 · answered by Anonymous · 0⤊ 0⤋
as ,long as you pay your bill within the specified time period they cannot give you a bad credit rating.
GOD BLESS
2007-03-21 13:34:13 · answer #7 · answered by thewindowman 6 · 0⤊ 0⤋