Question by neversummer187: Credit Help?
I accumulated quite a bit of revolving debt that I am paying off now. I have not used any of these account now in a while as I am paying them off. Once I get them to $ 0 balance I plan on kepeing them open a I will use them again but there may be quite a gap in usage. I know inactive accounts can end up hurting you as the issuer may stop reporting but how long does this typically take? and is it better to close these account or keep them open? Also a few of my cards have credit balance increases available. I dont plan on using the additional credit so will it be good to take advantage of these as it will make a bigger gap between my used and available credit?
Best answer:
Answer by Robert
Your strategy is a sound one. By paying your balance down you are increasing gap in your debt to credit ratio. This will help your credit score. Keep the accounts open and use them only once or twice a year after you have paid them off. This will keep them active and reporting. As long as they are reporting your credit will look good. Longevity of an account is one of the things that creditors look for when determining your credit worthiness.
Keep up the good work. You are doing fine.
If you have any further questions about your credit issues, you may contact me at nebula7693@yahoo.com
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I completly agree with Robert. You are doing the right thing, keep it up. You are in the minority.
I’d close them once you’re done. It will temporarily lower your credit score but it’s nothing major. If they’re inactive they’ll be closed anywhere from 6 months-1 yr or so anyway. Plus, the more open credit you have the worse it is because you’re more of a credit risk if you want to apply for a loan (car, house, etc.), and having all this available credit will temp you more into spending. Just pay them off, close them, and in the future think twice about if you really need to buy things on credit.
I agree with Robert.
If they are store cards, you should use them once every 4 to 6 months to keep them active. Stores cards are generally closed quicker than major cards.
It doesn’t take much to keep them active – buy a pair of socks or something cheap and pay it off when you get the statement.
It’s good that you are getting credit limit increases, even though you do not plan on using it. It helps your credit.
As far as one poster claiming that it will hurt your credit by having the cards open – that is not true. It hurts more to “not” have open credit.
Available credit does not equal debt.