I was told paying off your credit cards and closing the account will hurt your credit score?

Answer 1

Paying them off wont hurt at all; closing all of them could if you have no other credit. Just keep one or two open with no balances and you will be fine.

Answer 2

Your credit score is determined by a few different factors. One of them is your outstanding debt to available credit ratio. Meaning that if your have a total of $10,000 available to you on all of your cards/accounts and you owe a total of $9,000 - you will have a lower score than if you only owe $3,000.

So when you close an account you lower your available credit - and if you have high balances on other accounts, it affects your score adversely.

Also regular payments every month lend to a higher score than having no payment at all because you paid it all off. (Not by much, but every point helps, right?) I am not saying don't pay off your debt - just leave something trivial with a low interest rate and pay it religiously on time. That will help your score.

One last thing - length of credit is another factor. So when deciding which accounts to close, choose the more recent accounts first. Keep the older accounts (which have good payment history) open - even with a zero balance.

I hope that helps...

Answer 3

It won't harm your credit to close the account besides the shown fact that it won't help build your credit in case you close up the account. maximum considerable lenders opt to work out 2 or 3 open lines of credit in good status over a 2 300 and sixty 5 days era. It creates a self assurance which you're to blame approximately credit prolonged to you, which will finally impact your expenses of interest. The turn side is that in case you haven't any longer have been given any credit or too little credit, skill lenders are actually in touch as to what form of client you're concerning handling your debt. That undertaking can propose intense, intense expenses of interest as this offsets a number of the prospect the lenders experience they're taking over somebody and not utilising a stable credit background. on a similar time as you have this card, you ought to to persist with for a branch save card or gas card which you could use at your entertainment, is unquestionably paid off month-to-month might desire to you employ it, and does not comprise a month-to-month value basically for donning it on your wallet. as quickly as you have opened 2 lines of credit which do no longer require a month-to-month value, repay the $one hundred seventy five and lose the crappy card (propose you call to cancel the cardboard and get the main suitable pay-off quantity merely before paying it off or they might value you yet another $6 finding on the billing cycle).

Answer 4

yes if you plan to buy something big in the next 6-8 months

Pay them off and put the card away at home. When you close the account it lowers you available un-used credit therefore lowering your score about 10 points or so.

They say you should only charge 16% of your total limit on each card at one given time also.

Also dont open account you dont need or plant to use. Opening a new account also lowers your score. The higher your limit v/s amount owed affects it too. Call the card companys every 9-12 months and ask for a limit increase of about 200-300$ to also increase your score. Also ask for a lower APR. Maxing out cards lowers your score by 70 points.

Below is from :

http://www.bankrate.com/brm/news/credit-scoring/20040128a2.asp

"If someone tells you to close unused accounts to improve your score, they're pulling your leg," he says. "It won't help you and it can hurt you."

Closing unused accounts without paying down your debt changes your utilization ratio, which is the amount of your total debt divided by your total available credit.

"You appear closer to maxing out your accounts," he says. "That's why your score can drop. It doesn't mean people shouldn't close them, but don't close them to improve your score."

If you do cut up cards, though, leave the oldest one open, says Steve Rhode, former president of Myvesta.org, a national nonprofit financial crisis center.

The length of your credit history is another factor in your score. If you close the account of the credit card you got when you were a freshman in college and leave open the ones you just got within the last couple years, it makes you look like a much newer borrower.
"Keep a couple of the oldest open; I don't care what the interest rate is," he says. "Creditors don't care what the rate is."



Do you basic google search on Improving your credit score.

Answer 5

It won't really be a problem unless you close them all. The only way to have a good credit rating is by using credit. I speak to poor people on benefits all the time with great credit ratings becuase they use one card to pay another - you can be in desparate trouble and still have a good credit rating. But an 18 year old with no debts does not have a good credit rating.

Answer 6

Pay them down to zero balance and then just use them for a cash substitute for convenience. That looks very good on your credit score -- you have cards, you pay the balance, you are a good risk. And, with no balance from month to month, you are not getting poor or crazy.

Answer 7

Told by the credit card companies I am sure

My wife had four credit cards and crappy credit score.

I took her cards from her, paid them off and now her credit score is dammed good.

Get rid of all but one card and pay it off monthly. A weekly payment of the minunum monthly payment usually helps.

Answer 8

Yes, the best thing for your credit score is to carry a modest amount of debt and to make payments religiously. This shows that you're a good risk.

Answer 9

Just keep one card and keep it paid up to date. You can aeven pay extra into it in case you want to spend on a regular basis.

Answer 10

thats a total lie i did the same thing but it doesnt hurt to just have one and from time to time just buy small things and pay the minimum amount just to keep building your credit hope that helped you