Low Credit Score? Improve It By NOT Doing The Following
Don’t make the mistake of closing lots of credit accounts just to improve your score. This may seem like a contradiction of what you’ve already learned , but it really isn’t..
Many people think that to improve their credit score, they just have to pay off some debts and close their accounts. This is not completely accurate.. There are several reasons to think carefully before closing your accounts.
Keep your credit card accounts active. By closing them, you may find yourself re-applying for new cards and putting your credit history under a microscope..
Secondly, those who have a good, long-term credit history usually receive high, favorable points by most credit bureaus.. That means that closing the credit card account you have had since college may actually hurt you in the long run.
If you have credit accounts that you don’t use or if you have too many credit lines, then by all means pay off some and close them. Doing so may help to improve your credit score – but only if you don’t close long-term accounts you need. When you’re sure you won’t need certain credit in the future, close the most recent accounts..
Closing your accounts is a bad idea if:
1) You will be applying for a loan soon. The closing of your accounts will make your credit score drop in the short term and will not allow you to qualify for good loan rates.
Your overall debt balance will be too high by closing your accounts.. If you owe $10 000 now and closing some accounts would leave you with only $1000 of possible credit, you are close to maxing out your credit – which gives you a bad credit rating.
In the short term, closing accounts will not improve your credit score, but in the long run it can be beneficial.
Tags: fix my credit score, improve your credit score, repair my credit score, repairing my credit report