to close a credit card or not to help score

[dsgb610 10+ year member]

how long does it take your credit to update? what if i paid my stuff of now and applied for a loan next mo. what would happen?

 

[rippinitup7 10+ year member]

how long does it take your credit to update? what if i paid my stuff of now and applied for a loan next mo. what would happen?

you would be cutting it. some post sooner, others post later. i'd call 2 months safe. what i do is join a credit monitoring program that allows daily pulls of your credit report ( i used national city for $8.95/mo) and when everything settles as best as its going to get i cancel the membership and go apply for my loan/card/whatever.

 

[Bigrick31 10+ year member]

I made the mistake in the past of paying off all of my credit cards and closing them. Once you have a credit card i wouldnt close it. pay it off if you want but that dosnt really help your score. What helps your score is

Having credit for a long period of time

managing that credit wisely keeping your debt to available credit ratio high (lots of available credit and low debt)

Paying your bills on time.

Say you open a credit card once you hit 18 and at age 23 you close that card because it has a high interest rate and you open another card when you go to apply for say an auto loan it will show that you have only had credit for a short period of time because you closed the first account so it no longer counts. Even if the card sucks i would keep it open maybe go buy a burrito now and then on it to keep it active and pay it off. But what really helps your credit is only using about 20% of your available credit and manage your credit at 20% Buy a few things and pay them off frequently all while keeping your card at 20% sure its going to cost you money but youll be raising your credit score thus saving you money by getting you a lower interest rate in the future. IF you just pay off and close accounts what that is actually telling lenders is that you are not capable of handling your debt. So i say keep it open and manage it I wish someone had given me this info when i was 17/18 my credit would be amazing by now instead of just good.

 

[duece212 5,000+ posts]

Although, in my not so humble opinion, present credit scoring is a farce. But that's a tale for another time.......

i always thought it was BS how they make it difficult for you to even see your credit score, and they never quite explain how it gets to be exactly what it is.

Indeed, fico does things that make sense, but it also does stuff that just makes you wonder WTF.

Atleast you can pull your fico for equifax and transunion, pretty shitty that experian put the squash on consumers pulling their own fico score. Really sucks if you want to know all 3 to see what your middle score is before a mortgage, now I go in blind...its awesome.

 

[squeak9798 5,000+ posts]

i always thought it was BS how they make it difficult for you to even see your credit score, and they never quite explain how it gets to be exactly what it is.

Keep in mind the credit scoring agencies aren't a simple resource or a product designed to help consumers; they are a business just like anything else.

The scores themselves are their "product", and their methods of obtaining those scores (the mathematical & statistical models that actually generate the scores) are their trade-secrets. They've spent decades analyzing and creating those models. You wouldn't reasonably expect to walk into KFC and ask what their secret recipe is and receive a direct answer. Just the same, the scoring agencies aren't going to divulge information about their models in any great detail.