Monday, March 8, 2010

Closing Your Accounts

When you have too many accounts that are open it can affect your credit negatively. With the current credit models too much credit can be a warning sign to your creditor that you are just getting by. Your credit can be hit even worse if your balances on your revolving credit are too high or if you have opened any new credit.

So how do you raise your scores in this type of situation?

The answer is: very slowly. Closing out a bunch of credit cards at once can drop your scores tremendously. You are better off paying your cards off and leaving them open but if you are the type of person that are too tempted to use the credit card again then you need to close your cards out over time. Close out your accounts over time by closing each one every month or two. Also, remember that you still need some credit to have credit scores so don’t close everything out. Leave a couple credit cards open so you don’t end up without any credit at all.

Tuesday, March 2, 2010

Credit Tip of the week

Credit Card Changes

Two of the Credit CARD Act changes are already in place.

Consumers now have 21 days to send their payments in instead of 14 days and credit card companies must give consumers 45 days notice if their terms change, instead of 15 days.
Although it is noted that one important exception to the 45-day notification rule is if your credit card company decides to reduce your credit limit – the company can do that without any warning.

Should they lower your limit, call the company and ask for it to be reversed. If the credit card company refuses, then pay any remaining balance as soon as possible since lowering your credit limit could affect your credit score. Remember that it is ideal to keep your credit balance to credit limit below 40% or it will affect your credit negatively which in turn can lower your credit score enough to affect your rates on insurance, mortgages, and many other items.