Infantreflux.org | Credit Card???? Any Bankers Out There?

This topic has 9 replies, 1 voice, and was last updated 19 years, 4 months ago by Anonymous.

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May 25, 2007 at 1:40 pm #34456

Anonymous
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So I have a few credit card questions? Is it better to close your credit card account after you pay off the balance? Or is it better to keep several open accounts at the same time if all the balances are zero? Which is better for your credit and for getting mortgage loans? TIA

May 25, 2007 at 1:47 pm #34457

Anonymous
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Keep a few open, but for the most part close them out. It is points against you as far as how much credit has already been extended to you whether you owe balances or not.

As long as your credit is pretty good, getting a mortgage should not be a problem. Are you looking to take a mortgage for the first time? There are programs available to first time home buyers (FHA loans) that are guaranteed by the government, so you are not a risk to the bank if they make the loan to you. There is a cap on how much you can borrow, etc… but for FHA there is no income limit. There are other programs as well, (HUD) but those have income limits….

I only know my fair share of the mortgage and credit stuff from going through it. I am part owner of an accounting firm, but we don’t do this kind of accounting…..

May 25, 2007 at 1:56 pm #34460

Anonymous
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Thank you!

We already own our home (it was our first buy) but we are hoping to get a construction loan to add on and then refinancing it all with our mortgage after we complete the addition.

May 25, 2007 at 2:28 pm #34469

Anonymous
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The more credit cards you have balances or not can actually lower your credit score I believe. But I have 2 one as over draft on our checking account and one for fun stuff with a low interest rate.

May 25, 2007 at 4:59 pm #34492

Anonymous
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No, no, no. It actually depends on how long you’ve had the accounts. If they are very new, then definitely close them, but a huge part of your credit score is based on the average age of your accounts. The longer you’ve had credit, the better your score. So, if you have old accounts that are in good standing, you should leave them open.

I recently spoke to a financial counselor about this. I actually have over $60,000 in available credit from old credit cards that I no longer use. She said that I am better off leaving them open because closing them would drop the average length of accounts. I didn’t believe her, so I pulled up my free credit reports at http://www.annualcreditreport.com (you can check once a year for free) and I paid the $7 to see my FICO score as well (the report is free, you just have to pay if you want to see your FICO score which is what banks look at) and my score is really good (814 out of 850).

So, if they are old – don’t close them!

May 25, 2007 at 5:21 pm #34500

Anonymous
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Oh, thanks! That is so good to know bc most of the accounts are old. I don’t think I’ve opened a new one in awhile.’

I getting my credit report as we speak!

May 27, 2007 at 9:26 pm #34647

Anonymous
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I heard that checking your credit score often can actually lower it…anyone heard of this?

May 28, 2007 at 2:09 pm #34706

Anonymous
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My understanding (and it’s still pretty limited despite the volumes of research that I”ve done) is that applying for credit often can hurt your score, but checking it is fine, especially if you are doing the free annual check. They’ve actually done a lot of advertising, saying that you should check your credit every year. Several things that I’ve read actually say that you should check your credit every four months. You can get a free report annually from each of the three credit agencies, so, for example, you would get one in January from TransUnion, one in May from Experian, and one in September from Equifax.

On the report that you get, it shows all of the people that have made inquiries into your credit, but it says somewhere on there that the only ones that hurt your score are the ones initiated by you – meaning due to you applying for something. So… there are tons of “junk mail” type inquiries on my credit report, but it doesn’t hurt me because I didn’t ask them for credit, they are just trying to convince me that I need it.

June 25, 2007 at 8:49 pm #37920

Anonymous
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I know that this post is really old, but I read this article today and it reminded me of this post. So, I figured that it wouldn’t hurt to add this.

http://articles.moneycentral.msn.com/Banking/YourCreditRatin g/4creditScoringMyths.aspx

June 25, 2007 at 9:02 pm #37922

Anonymous
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Thank you!!!!
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