Expert Debt Management
Expert Debt Management
Closing Your Credit Card Accounts
Have you been told in the past that if you simply close some of your credit card accounts that you can improve your credit score? Have you also been told that having too much credit is not good for your over all credit score? If so, you have been given some faulty information. It is not how much credit or how many accounts you have that will affect your credit score, it is how many past due or unpaid debts you have that will bring down your credit score.
Wondering if you should still consider closing your credit card accounts? Whether or not closing accounts will benefit you really depends on your situation. In many cases closing the accounts will help you do away with your debt, so as long as this is used as a method of reducing and solving your current debt issues closing your accounts may be a good thing. Remember the way to improve your credit is not necessarily to close accounts, but to make sure that you have more available than used credit. You want to make sure that you have a positive credit to debt ratio. In other words, the more available credit you have the better your credit score will be, regardless of how many accounts you have open.
When You Should Close Accounts
You may want to consider closing your credit card accounts if you are doing so in an attempt to eliminate debt and get your life as well as your credit score in a positive place. You should also consider closing your credit card accounts if you are entering into a debt consolidation program, if you want to limit your spending abilities, if the account has very high interest, or if you are having a difficult time paying down your accounts. In most other situations, it is not advisable to or necessary to close your credit card accounts.
You may be afraid to add accounts, but remember it is not the number of accounts that you have, it is the amount of debt that you currently have. Your goal should be to keep all accounts at less than 50% but ideally less than 30% of your credit balances. You should also remember that a lot of the accounts that you have may not even show up on your credit report because not all creditors report their accounts to the credit bureaus. For excellent information on fixing your credit along with programs and services vist the above link.
Disclaimer: This site is not , nor should it be taken to be, legal, financial or other professional advice. It merely provides a generalized guidance and generalized information only. Consult a financial advisor or an attorney to discuss any legal or financial issues involved with credit and debt decisions.
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