Are You Closing Credit Cards?
I see it all the time. People come to Integrity Credit Solutions wanting to know how to fix credit but get upset when I tell them that they need open, active credit cards. Simple lesson here, closing credit cards will hurt your credit score. Having open credit cards that you are actively paying on is essential to your credit repair success. The FICO scoring model (the most widely used model in the U.S.) uses your credit card or revolving debt ratios to calculate 30% of your credit score. Your past credit history is 35%, so you can see they look at credit card debt very seriously. Here’s the rest of the breakdown:
Credit Card Debt
Here’s how your credit card debt is calculated. If you have a credit card with a $300 limit and you owe $150, you have a debt ratio of 50% because you owe half. The beauty of credit cards is that they can be open for many years. Unlike a personal loan or auto loan that’s usually has a term of 5-6 years, credit cards can stay open for 10, 20 years or more. The average age of your credit accounts is 15% of your credit history.
If you have 2 credit cards with $300 limits, the total credit available is $600. If you owe $300, you have a 50% debt ratio. If you close one of the cards, your debt ratio just jumped to 100% because you no longer have $600 available. You only have $300. IF that card has been open for several years, closing it can lower your average age of accounts and that’s one less account you have that you are paying on time. So that credit card that you’re thinking about closing impacts
Payment history – 35%
Revolving debt ratio – 30%
and Average age of accounts – 15%
That’s 80% of the factors that impact your credit score, that’s HUGE!
On a different note, if you do not have any credit cards reporting, opening one improves your debt ratio and payment history as you continue to make monthly payments. This is one of the biggest reasons people do not succeed in fixing their credit.
With a proven process to identify and remove negative information that’s inaccurate or unverifiable and building credit like a pro, you can fix your credit and buy your dream home!
If you have past credit problems but are on top things now and are in a good place financially, you are a good fit for credit repair.
Bad Credit, No Problem
If you’re looking for credit help you can trust, you’re in the right place. Our credit blitz does more in 30 days than most credit repair companies do in several months. Our team of professionals know how to overcome the road blocks and stall tactics often used to slow down or stop your credit repair efforts. You’ll learn exactly how your credit score is calculated so once you achieve good credit, you can keep it!
Before you know it, you’ll be buying your dream home and living the lifestyle that you’ve worked so hard for. Being stuck renting and throwing away your hard earned money in high interest rates will soon be a thing of the past.
Credit Mastery Course
If you’d like a step by step program designed to walk you through your credit repair process, you’ll love our “Credit Mastery Course”. This course is made of over 25 detailed videos and 15 easy to use templates that will take the guesswork out of repairing your credit. The “Credit Mastery Course” will help you do a better job than most credit repair companies at a fraction of the cost. If it sounds like our “Credit Mastery Course? may be for you, click this link. http://creditmastery.valueaddon.com/users/subscribe
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Dedicated to your credit success,