Zero Percent Credit Cards

If I Close My Credit Card Account Will it Raise My Credit Score?
By Helen Hecker

If you’re thinking about closing a credit card account that you aren’t using or have more than one, you may have wondered if it’s a good idea to do it. Some people think it will raise their credit score.

Here is why you don’t want to do it. When lenders are making a decision as to whether to lend you more money they will look at how much credit is available to you now – they call this the utilization ratio.

If you have 5 cards now and they each have a limit of $10,000 or so each and you owe about $6000, your rate would be 12%, which is good, from their viewpoint. If you were to close 4 of the credit card accounts then your utilization ratio would jump to 60% or so. This would be bad. Now you haven’t even used the cards but it looks like you have which means you might look like you’ve overextended yourself.

You want to keep this ratio at 50% or below. So take a look at your credit cards and if you really don’t want any of them don’t close the accounts. Take the cards you don’t want and cut them up. This way you keep the accounts open and are not using them to rack up more debt.

If you only have one card it would not be a good idea either, since you may need that credit card account for emergencies. Especially if you don’t have an emergency fund. Experts right now are advising to use your credit cards as necessary and make the minimum payment and conserve your cash for emergencies.

Your credit score or FICO score, report and history should not suffer if you continue to keep your credit cards. The lenders also look at how long you’ve had your cards and the longer you’ve had them the better it will be in terms of your credit score and history.

Credit cards, as much as they can be a problem, can often come in handy in emergencies and should be given some leeway for saving one from extreme hardship.

So closing a credit card account won’t raise your score but could lower it. Only do so if you have no other option. If you absolutely have to cancel one of your cards, then cancel the newest one first, of course, that has the shortest history to lessen the effect on your credit report.

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Build Credit History – 3 Easy Ways to Build a Solid Credit History Quickly
By Joseph Crutchfield

Learning to build credit history is actually very simple. The key is to continually and proactively boost your credit score on a regular basis throughout your life once you know how.

Remember, mortgage and auto lenders are not the only sources interested in your credit history. Landlords, employers, even utility companies may also want to check your credit during the course of your life. So, making it a regular, consistent practice to build credit history over time has never been more important than it is today.

In this article, I am going to show you a few easy, time-tested ways to build credit you can use right now to start establishing or restoring a good credit history:

1. Get A Recent Copy Of Your Credit Report

By law, you can get a free copy of your credit file at annualcreditreport.com each year. Check each listing for accuracy. Start disputing any false or out-dated entries with the 3 credit reporting agencies (Experian, TransUnion, and Equifax). Most credit reports gather several errors over the years, so left unchecked your credit history will suffer. Start making cleaning up your report a consistent habit and your scores will improve considerably over time.

2. Add A Few Good Accounts

Adding checking and savings accounts from your local bank into the mix can help your outlook greatly. Although this step is commonly overlooked, lenders do take notice of well-managed accounts and see them as a sign of stability.

Start paying down your credit cards and keep their use below 30% of your limit each month. If you don’t have credit cards, apply for one. Unsecured with low interest rates if possible. If not, get a secured card. The key is to start using them conservatively and responsibly to show lenders your discipline.

3. Get A Small Installment Loan

Once you have well-managed revolving credit in place, consider getting an installment loan from your local bank such as a car loan or personal loan. You need to have a variety of forms of credit to build credit history and get good scores, so adding a manageable installment loan into the mix can help greatly.

If you want to learn a few more advanced ways to build credit history quickly and boost your credit score now, just click here now

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