Credit Score?

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Posted by MonkeyLuv

I don't think that's true. From everything I've read, you shouldn't close credit card accounts because it lowers your lines of credit. It's less information on which to base your score.

I think just paying things off and on time will help.

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yeah all my accounts are 100% on time and mostly paid off (except student loans). I was hoping there was something else I could do - alas!

Thanks!

Here are a couple of sites that have info regarding credit scores. Both seem to suggest that closing accounts will probably lower your score in the short term.

'Don't close unused credit card accounts near loan time. If you have several credit card accounts but are only using a few of them, you'll only raise your balance-to-limit ratio if you close the unused ones. You also shouldn't open new accounts when applying for a loan if possible. If you have a short credit history or very few accounts, opening a new credit line may lower your score since you don't have a proven track record, said Jan Davis, an executive vice president at TransUnion. What's more, a new account will lower the average age of your accounts, another factor in your FICO score.'

http://money.cnn.com/2002/02/15/debt/q_fivethings_creditscore/ http://www.myfico.com/CreditEducation/?fire=1

there are too many theories to judge... when it comes down to it, the company will look at all your accounts regardless of score and make up there own scoreing system.

open accounts that aren't use 'can' be bad because you can get approved for say a mortage, then use all your other cards to go on a shopping spree...then techincally, you can go over what you can afford. So open credit can be bad too. banks will see you have the potinetial of using all these extra accounts.

just dont have a card for everything and store.

Other factors gointo you report as paying on time, do you just pay min due,activity, etc...

Mortgage companies also look at your overall liability. If you have 5 credit cards with 10,000 limits you are exposed to a $50,000 liability. You're best bet is to lower the limits not close the cards. You want to show that you are a good risk but not a risk for more substantial debt. All in all, the biggest part of your credit score comes from a good payment history and actually having a good payment history for a long time. Run your credit report a few times a year to check for fraud and identity theft.

Mortgage companies also look for good work history, salary, debt ratios and longevity in your field.

Jeez-I sound like a commercial for Equifax!

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Posted by Blu-ize

Mortgage companies also look at your overall liability. If you have 5 credit cards with 10,000 limits you are exposed to a $50,000 liability. You're best bet is to lower the limits not close the cards. You want to show that you are a good risk but not a risk for more substantial debt. All in all, the biggest part of your credit score comes from a good payment history and actually having a good payment history for a long time. Run your credit report a few times a year to check for fraud and identity theft.

Mortgage companies also look for good work history, salary, debt ratios and longevity in your field.

Jeez-I sound like a commercial for Equifax!

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yeah..i said this but in different words..
and just to bring a point about job history..
I'm in the middle of mortage process and I just switched jobs (big no no) then we had to make it look like the same field. Granted, i make 1/3 more then i used to make, they want you to stay in your field. Bank could say, you might not like this job so i may quit, etc...

student loans are not held against you for anything

my FH is a mortage banker as well

keep all your accounts open- it shows you credit history-

personally my first card was a store card

if your credit is already good- there isn't much you can do to go from a 700 to a 750 or something- and there isn't much of a differnce in rate - once you have 'good' credit - it's all the same

I just had this conversation my FH about this-

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Posted by Beth1210

if your credit is already good- there isn't much you can do to go from a 700 to a 750 or something- and there isn't much of a differnce in rate - once you have 'good' credit - it's all the same

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Thanks - I am happy with my credit score - it is excellent, but since we are getting a mortgage I was hoping to make it a little better (hoping I would get a slightly better rate!)

I am actually a little annoyed and not sure what to do in this scenario.

I had a checking and savings account with Chase... and all of a sudden a new credit card appeared in my 'linked accounts' online.

I wasn't sure what this was... so I waited it out. Low and behond a new credit card showed up at my house. And its a real credit card too (not one of those come sign with us bogus cards).

They actually opened this account for me. 15k limit too which is higher than anything I have currently.

But this aggrevates me because I didnt want this card. I don't need it. I am probably going to call them and tell them to close it. Since it was just opened... it shouldnt affect my score. I don't need an extra 15k of liability lying around.

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Posted by SuzBride

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Posted by Beth1210

if your credit is already good- there isn't much you can do to go from a 700 to a 750 or something- and there isn't much of a differnce in rate - once you have 'good' credit - it's all the same

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Thanks - I am happy with my credit score - it is excellent, but since we are getting a mortgage I was hoping to make it a little better (hoping I would get a slightly better rate!)

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it mostly your fico score that they look at, plus debt to income ratio

time at job, if you pay your bills on time, etc

if you have excellent credit- it going to be harder to raise that score- you have a better chance of lowering it- so don't do a thing now

your rate will most likely be the same

I am in the same position as you and my FH told me there is really nothing more for me to do- but to keep doing what I am doing

so I am leaving it at that!

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Posted by SuzBride

Someone told me if I close my smaller credit cards (Macy's, Express, JCrew), it will help improve my credit score (it is good already, but I would like it to be better for mortgage stuff!) Does anyone know if this is true? Or other ways to improve credit scores by a few pts?

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To improve your score by a few points, you can pay off an account or at least pay it down. That is the only way to improve your score fast. Otherwise, on time payments and NOT making the minimum payment will raise your score in the long run.

My mortgage broker says he tells all his clients to keep credit card use to a minimum and keep the balances at 49% or preferably 25% of the limit if you have to use credit. I only use my AMEX and pay it off at the end of the month. I use MC or VISA if the store (usually on-line stores) don't take AMEX and I pay the bill off in full when it comes.

Do not close accounts if they are long term. I made the mistake a few years ago of closing an account I had since 1993 with MBNA. I never used the card so I closed it which made my credit history shorter. Thank goodness I have an NYSBA credit card via MBNA so I was able to have them tack on the 1993 credit history to the current card.