credit rating and department store credit cards
 

i have a really great credit score for someone my age. but i want it to be even higher.

does it really raise your credit score if you close out credit cards that you never or rarely use (like gap, j crew, etc)? i have about 3 or 4 cards that i just never use, but keep them just in case. i'm willing to get rid of them if they will actually imjpact my credit rating in a positive way.


help please!!! :)

Re: credit rating and department store credit cards
 

In reviewing someone's credit report, a creditor will be somewhat concerned if you do a "closeout sweep" because that will signal that you don't trust yourself with credit. Depending on your income and what sort of balance (if any) you carry on these cards, closing them down may or may not be a good idea. If you're pulling in a good steady income and aren't carrying a balance, then close just one or two. That way they see you have credit and are responsible. If this situation does not apply to you (irregular income or balances), then definitely do what you can to close out these cards. Just don't do it all within a month's time. Cancel one about every other month or so. And after u are done cancelling, don't apply for any sort of credit for about 3 months. Try to keep at least 2 accounts of any type (auto loans, school loans, credit card) open at all times. And try not to let your balances exceed 30% of your credit line (i.e. if you have $10000 of available credit, keep your total balances down below $3000). Good luck w/ whatever you do!

Oh and another option...if you have a balance on a dept store card w/ a high rate, transfer it to a credit card w/ a lower balance and then close out the high rate card. Not only will you be helping your credit report but also you will save yourself a good amount of money by not paying that much interest.

It actually HURTS your credit score when you close an account. So get your balances to zero on those cards and do not close the accounts.

This is advice from Suze Orman on her show (she's a financial guru).

Also, I got this from a website (www.bankrate.com):

"If your goal is to improve your credit score, closing accounts is not a good tactic," says Craig Watts, consumer affairs manager for Fair, Isaac and Co. based in San Rafael, Calif. "Paying down credit cards is terrific. Closing them is not going to help."

Canceling a large amount of unused credit could actually hurt your credit score.

Okay, so I hope that helped! :)

wow. this is all very interesting.

i actually have never had a balance on a credit card--i've always paid in full. always.

none of these cards have been used in the last year, at least. i really don't need any of them.

i still have several student loans as well as major credit cards open.

so i guess i shouldn't close any of them.

If you haven't used them in over a year, the credit card company may have already closed them for you. I got a copy of my credit report when I bought my condo. My store credit cards did not even appear on it because it had been forever since I last used them.

Here's a useful sight for your credit questions. There is a lot of information so wad through it as you see fit.
www.bayhouse.com


Just trying to be helpful,
Mark