Comments on: How will this change my credit status? http://www.student--creditcards.com/2009/08/how-will-this-change-my-credit-status/ Helping students pick a credit card Mon, 31 May 2010 22:33:45 -0400 http://wordpress.org/?v=2.8.4 hourly 1 By: jon g http://www.student--creditcards.com/2009/08/how-will-this-change-my-credit-status/comment-page-1/#comment-193 jon g Tue, 01 Sep 2009 05:57:33 +0000 http://www.student--creditcards.com/2009/08/how-will-this-change-my-credit-status/#comment-193 closing your credit cards lowers your score . I have seen it happened many times closing your credit cards lowers your score . I have seen it happened many times

]]> By: hivoltgfly http://www.student--creditcards.com/2009/08/how-will-this-change-my-credit-status/comment-page-1/#comment-192 hivoltgfly Mon, 31 Aug 2009 00:04:56 +0000 http://www.student--creditcards.com/2009/08/how-will-this-change-my-credit-status/#comment-192 I am a former financial counselor for a consolidation firm in Orlando so I can answer your question. Your credit score is based on several factors. 1) 35% of it is payment history. Making payments on time is the most important thing to your creditors. 2) 30% is total debt and available credit. This is where your question comes in. Your creditors look at overal debtedness as an important factor of responsibility, and remember this is overall debt + potential debt. So if you have 5 credit cards with no debt on them, your credit score may be reduced because this is potential debt. You could go out tomorrow and max out your cards and be in serious trouble. 3) 15% is account age. The older the better! 4) 10% frequency of applying for credit. Go out tomorrow and apply for a car, a Macy's account, and a Victoria's Secret card, and you'll see how this will reduce your score. 5) 10% Wild card factors. Such as types of credit lines. ex. Mortgage = Good. Credit Card = Bad. So my advice is this. It sounds like you may be considering closing certain accounts etc, based on your question. I would definitely recommend closing any of your newer accounts but maintaining the older ones and keeping them open. If the older ones have a large max on them, you can call your creditors to reduce the limit, therefore lowering your potential debt without closing the account. If you have several newer accounts that you are considering closing, you may want to transfer all their consolidated debt onto a low APR credit card, and then closing them appropriately. (PS, when you close an account, make sure that you ask the creditor for a letter in writing confirming the account closure). So in summary, closing accounts may increase your score because it eliminates potential debt, but not if you close the older accounts, because this eliminates the overall account age percentage (15%) and eventually your good payment history with that creditor (35%)! I am a former financial counselor for a consolidation firm in Orlando so I can answer your question. Your credit score is based on several factors.
1) 35% of it is payment history. Making payments on time is the most important thing to your creditors.
2) 30% is total debt and available credit. This is where your question comes in. Your creditors look at overal debtedness as an important factor of responsibility, and remember this is overall debt + potential debt. So if you have 5 credit cards with no debt on them, your credit score may be reduced because this is potential debt. You could go out tomorrow and max out your cards and be in serious trouble.
3) 15% is account age. The older the better!
4) 10% frequency of applying for credit. Go out tomorrow and apply for a car, a Macy’s account, and a Victoria’s Secret card, and you’ll see how this will reduce your score.
5) 10% Wild card factors. Such as types of credit lines. ex. Mortgage = Good. Credit Card = Bad.

So my advice is this. It sounds like you may be considering closing certain accounts etc, based on your question. I would definitely recommend closing any of your newer accounts but maintaining the older ones and keeping them open. If the older ones have a large max on them, you can call your creditors to reduce the limit, therefore lowering your potential debt without closing the account. If you have several newer accounts that you are considering closing, you may want to transfer all their consolidated debt onto a low APR credit card, and then closing them appropriately. (PS, when you close an account, make sure that you ask the creditor for a letter in writing confirming the account closure).

So in summary, closing accounts may increase your score because it eliminates potential debt, but not if you close the older accounts, because this eliminates the overall account age percentage (15%) and eventually your good payment history with that creditor (35%)!

]]> By: Stephen R http://www.student--creditcards.com/2009/08/how-will-this-change-my-credit-status/comment-page-1/#comment-191 Stephen R Thu, 27 Aug 2009 22:50:59 +0000 http://www.student--creditcards.com/2009/08/how-will-this-change-my-credit-status/#comment-191 Don't knock yourself out by paying it all off at once. Pick the cc's you don't want anymore pay them off but do not cancel them. Hide them in a drawer at home. Student loans have a great low rate most of the time. Do not do a consolidation loan it will end up costing more % at a higher rate. Show you can pay and never miss a payment and your credit score will improve. Don’t knock yourself out by paying it all off at once. Pick the cc’s you don’t want anymore pay them off but do not cancel them. Hide them in a drawer at home. Student loans have a great low rate most of the time. Do not do a consolidation loan it will end up costing more % at a higher rate. Show you can pay and never miss a payment and your credit score will improve.

]]> By: David H http://www.student--creditcards.com/2009/08/how-will-this-change-my-credit-status/comment-page-1/#comment-190 David H Wed, 26 Aug 2009 12:42:01 +0000 http://www.student--creditcards.com/2009/08/how-will-this-change-my-credit-status/#comment-190 The important thing is paying on time. When you pay off an account your debt ratio goes down which has a positive effect on your score. As far as closing accounts, I myself would need to see proof that this act has a negative effect on scores. I just closed three unnecessary accounts and will get back to you on those results The important thing is paying on time. When you pay off an account your debt ratio goes down which has a positive effect on your score. As far as closing accounts, I myself would need to see proof that this act has a negative effect on scores. I just closed three unnecessary accounts and will get back to you on those results

]]> By: sweetblackman27 http://www.student--creditcards.com/2009/08/how-will-this-change-my-credit-status/comment-page-1/#comment-189 sweetblackman27 Tue, 25 Aug 2009 04:21:14 +0000 http://www.student--creditcards.com/2009/08/how-will-this-change-my-credit-status/#comment-189 it will ruin everything it will ruin everything

]]> By: anncie_2001 http://www.student--creditcards.com/2009/08/how-will-this-change-my-credit-status/comment-page-1/#comment-188 anncie_2001 Sun, 23 Aug 2009 04:37:48 +0000 http://www.student--creditcards.com/2009/08/how-will-this-change-my-credit-status/#comment-188 getting rid of credit cards won't change your score. Payment timing is what will improve your score but the credit folks say that three open accounts in good standing is all you really need. Pay on time and that will improve it. Usually after three months the score will change. getting rid of credit cards won’t change your score. Payment timing is what will improve your score but the credit folks say that three open accounts in good standing is all you really need. Pay on time and that will improve it. Usually after three months the score will change.

]]> By: cziizi http://www.student--creditcards.com/2009/08/how-will-this-change-my-credit-status/comment-page-1/#comment-187 cziizi Sat, 22 Aug 2009 17:05:55 +0000 http://www.student--creditcards.com/2009/08/how-will-this-change-my-credit-status/#comment-187 depends where you are. in the US cancelling a credit card can negatively affect your credit rating. in Canada it will positively affect it. there's no rhyme or reason to it, it's just an arbitrary law. depends where you are. in the US cancelling a credit card can negatively affect your credit rating. in Canada it will positively affect it.

there’s no rhyme or reason to it, it’s just an arbitrary law.

]]> By: tonalc1 http://www.student--creditcards.com/2009/08/how-will-this-change-my-credit-status/comment-page-1/#comment-186 tonalc1 Sat, 22 Aug 2009 15:13:24 +0000 http://www.student--creditcards.com/2009/08/how-will-this-change-my-credit-status/#comment-186 It'll show that you are becoming a better credit risk and can pay off your debts. Having less credit cards means you have less access to credit (i.e. cash), which is a plus for your credit score. See if you can get down to one credit card...or none. It’ll show that you are becoming a better credit risk and can pay off your debts.

Having less credit cards means you have less access to credit (i.e. cash), which is a plus for your credit score.

See if you can get down to one credit card…or none.

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