After full payment is made, I don't want to make the same mistake again. Which is better for my credit report: cancel the cards, or have the accounts closed "at customer's request"? Btw, the cards will be cut up.
2007-10-06 09:19:26 · 7 answers · asked by Isabel 3 in Business & Finance ➔ Personal Finance
Regardless of how fast you pay back the debt, do not close the accounts. You can cut up the cards, but do not cancel the account out. The reason is simple. A good part of your credit score is based on your debt to credit ratio. If you have a lot of credit, but not a lot of debt, you will garner a higher score than if you had the same debt with lower limits. Therefore, keep those cards open to keep the credit limits.
2007-10-06 10:16:07 · answer #1 · answered by Jay P 7 · 0⤊ 0⤋
Well don't close all of them. You will need a few of them in the future, at least one for travel or purchases that require a credit card. I would close the accounts that you don't need. The total available unsecured credit is taken into account on your credit report, since you technically have access to that amount at any time. So if you have 5 cards with a $20,000 line of credit, you have $100K in unsecured credit.
However if you have the balances under 20% and have made your payments timely that will benefit you more than the high amount of unsecured credit on your FICO score.
In your case you obviously don't think you can control this. So call the CC companies, close the accounts, shred the cards and only keep one for future use. Pay it off each month.
2007-10-06 10:50:40 · answer #2 · answered by Anonymous · 0⤊ 0⤋
If you want to boost your crdit rating your going to have to learn how to handle credit responsibly!! Your credit rating and maintaining it properly is the most important thing you can do with your life. Pay the balance off to 1/3rd of your credit limit or less, but not completely. Make regular payments on time. Your credit rating is going to get you a home mortgage someday and this is the biggest investment you can make in your lifetime! The biggest mistake you can make here is not practising self control. Go to the website below. You can learn a lot about cleaning up your credit report and KEEPING it that way! This website is currently being developed so get their RSS feed. You CAN do this so don't give up, learn from it! It will mean a great deal of profit to you!
2007-10-06 09:52:33 · answer #3 · answered by Anonymous · 0⤊ 0⤋
First of all, CUT UP THE CARDS THIS MINUTE! Get some money in savings for an emergency fund so that you never revert back! Call the credit card companies and close the accounts. Get intense and pay this down, WAY TO GO!!
Hope this helps!
2007-10-06 09:28:14 · answer #4 · answered by Anonymous · 1⤊ 1⤋
As long as the accounts are closed in good standing it will not matter. Close those credit cards OUT. Use a debit card. That way you never spend more than you can afford.
2007-10-06 09:24:13 · answer #5 · answered by David G 3 · 0⤊ 1⤋
Jay P and the Scorpion have it correct - cut them up, but DON'T CLOSE THE ACCOUNTS. Paying them off will improve your credit score, but proceeding to close them will HURT it.
2007-10-06 18:17:49 · answer #6 · answered by lissyanna21 1 · 0⤊ 0⤋
Don't cancel the accounts, that just hurts your FICO score, just cut the cards up.
2007-10-06 10:31:25 · answer #7 · answered by The Scorpion 6 · 0⤊ 1⤋