Did you know that closing your credit card account affects your credit score? Your credit score will go down because you closed the account!  It’s  True!  I know it’s crazy but let me explain why; this is because it reduces the amount of available credit that you have which can reflect to a certain degree negatively on your ability to obtain credit from a financial institution.

Here is an example: let’s say that you have seven maxed out cards and one paid off card.  You decide to close the account that is paid off; this in turn affects your credit score because now all that your credit history repair services shows is that you have used up all of your available credit.  This in effect is why this can become a problem.

This tells the scoring models that you are a credit risk because none of your accounts are open and paid off but perhaps more importantly it reduces the overall amount of credit available to you which suggests that you are over extended.

There you have it…you get dinged for not having enough credit and for having too much!

As far as credit scores are concerned, if your balance is paid off then you should keep the credit card open because it improves your credit score. Even as it lies dormant for a couple of years it won’t hurt you. By closing the account you increase the difference between your card balances and your available credit.

If you have a significant amount of credit card debt then you should keep the paid off accounts open until you can pay off the majority of your open debts. If you want to avoid charging those cards then you should cut those credit cards in half and keep them so that you have the account numbers and put in a safe secure place, like a safe deposit box.

The bottom line…especially in today’s economic climate, think carefully before making any decision that could affect your ability to borrow in the future.

Be Bold!
Herschel

Utility companies are getting into the fray of checking for credit worthy customers and tacking on an extra deposit or increased deposit because someone has a poor credit report. It seems it doesn’t take much anymore to cause a company to not trust you and tack on an extra fee, or higher interest rate, etc.

The solution here is to have a good credit score and keep it that way. However, there are those of you who started off on the wrong foot and need help to get things under control. By applying the secret tips in this book, you will realize a great increase in your credit score. However, managing your account correctly won’t get the negatives off your credit report and you will have to wait 7 years to 10 years to see them drop off. There is a better way. Go to the Credit Repair Attorneys Section and see what can be done to get your credit repaired.

Credit is a tricky subject because we don’t have the secret key that unlocks the proprietary information or formula of the credit bureaus and Fair Isaac Corporation. They created the scoring modules that are in use today to create credit scores on the information in your credit file. However, through exhaustive research and intensive study, we have come to see the secrets and tricks the credit bureaus use and understand how it works… almost.

Because there are hundreds of factors involved in creating a scoring module and how it affects the information in your credit file, it is difficult to ascribe a perfect number of points to what a tip or strategy will do to increase or decrease your credit score. However, this much we absolutely do know… that if you do follow the tips and strategies in this book then you will see a rise or fall in credit points depending on if the action is a good action or a bad action on your part.

Take heed to read the tips and strategies and relate them to your own credit file and the information contained in it. Read it, get to know it and then read the strategies to use to get your scores going up instead of down. This will help you get the highest scores possible and create an opportunity for a great financial future . Now, go and get start and remember, that Every Point Counts!

There are 5 areas of importance in the scoring modules of the credit bureaus.

They are:

1 – Bill payment history – 35% of your score is attributed to this section.

2 – Account Balances – 30% of your score is attributed to this section.

3 – Length of time opened – 15% of your score is attributed to this section.

4 – New Accounts – 10% of your score is attributed to this section.

5 – Types of credit used – 10% of your score is attributed to this section.

Terms:

Creditor = the company that extended the credit to you.

Payee = the company that you make the payments to.

Payer = this is you, the person that makes the payment to the company (Payee) that you owe.

Opportunities for credit come in the mail if you are doing certain things or member of certain organizations. I have found that if you are going to school, you are a target for credit card repair companies to send you multiple offers in the mail. You are gaining an education and are going to have more money earned to pay for things than those people who do not go to school, college or university.

If you join a frequent flyer organization, even if you don’t fly very often or at all, this will put you on a list of preferred offers from credit card companies to offer you opportunities to apply for their credit cards.

Opportunities come in a wide variety with multiple interest rates, pay back plans, credit limits and penalties if late or over limit. I am finding that credit card companies put in the fine print that they can check your credit when ever they feel like it and if they see your credit score drop below a certain point, that they determine, they can increase your interest rate from that nice 6% you started with to 19, 24 or even 29%. The highest I have seen an interest rate is 33%. I suppose this could go even higher if the credit card companies can get away with it.

It would be important to compare the differences in credit cards not only for interest rates, credit limits and penalty factors, but also for rewards for purchases and length of time with the company. There are cards that give you cash back or cards that give your flight rewards. Some will give you products to choose from a catalogue. If you don’t fly much, then getting a card with flight rewards may not be the best plan for you. Get one that fits your life style and remember to get that card paid off every month or you will be paying for every penny of the “reward” you are getting rather than have it be a great asset for you by paying your card off every month.