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 Loxodon2 |
Question about credit |
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Posts: 9344 03-20-08 3:01 PM |
So i have about 10 credit cards/accounts that at one point or another were almost maxed out. They are all at a 0 balance right now(with no desire to use them
again) with available credit ranging from 0-3000 dollars. I am wondering what will "look better" on my account; leaving the credit accounts there
with a 0 balance or closing them out.
Thanks in advance! |
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Payn Bringer |
#1 | ||||
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Posts: 460 03-20-08 3:08 PM Slave of Suezb |
From what I've read and heard, 3 credit cards is a good number to have, the ones with the longest history of good payments. Put a pack of gum on them once
in a while. I use one of my cards purely for paying $9.95 for WoW each month so it has payment history.
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Federiko EQ |
#2 | ||||
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Posts: 3288 03-20-08 3:24 PM You can never have too |
Ideally you want a small number of accounts (<5) that have been open a long time (higher average account age, the better)... with large limits, less than
10% utilization, and no payment blemishes in the past 2 years or so.
The high limit thing isn't necessary but it helps keep your total utilization down if you go nuts every once in a while. If you pay them off every month, it doesn't matter much. |
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Hordain Prima |
#3 | ||||
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Posts: 1333 03-20-08 3:24 PM |
Close out them card down to the number you can live with. The viewpoint is these are easily accessed debt you can get yourself (or someone else can get you)
into very quickly. It's viewed as a pure risk. Reduce the open accounts to reduce the risk perception, especially in this day and age.
"I got kicked off the high school debate team for saying `Yeah, well F#CK YOU!` I thought I had won. The other kid was speechless. I thought that was
what we were tryin' to do." - Ron White
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Federiko EQ |
#4 | ||||
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Posts: 3288 03-20-08 3:30 PM You can never have too |
It's viewed as a pure risk. Reduce the open accounts to reduce the risk perception, especially in this day and age.This is only true on a manual review of your credit history which really would only happen if you're buying a house. 95% of things you'd be approved for, including car loan rates, are just run through the one of the 3 major credit reporting agencies (Experian, TransUnion, Equifax) for a FICO number and your approval or rate is based on that number. Those agencies uses formulas that weigh utilization % and payment history the highest. Potential use of high limits is not much of a factor, if any. |
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Hordain Prima |
#5 | ||||
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Posts: 1333 03-20-08 3:59 PM |
There's a differing opinion with the credit debit avalanche that's waiting to happen. I wouldn't count on past behavior having sway in the coming
months or years. I'm seeing changes in lending behaviors at differing levels.
"I got kicked off the high school debate team for saying `Yeah, well F#CK YOU!` I thought I had won. The other kid was speechless. I thought that was
what we were tryin' to do." - Ron White
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Snaille |
#6 | ||||
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Posts: 276 03-20-08 6:54 PM |
Might ask this question on a credit forum...and don't close anything until you have a solid answer. I closed down a few old accounts a long time and
shouldn't have.
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 Feydakin Rainsong |
#7 | ||||
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Posts: 5125 03-20-08 9:01 PM Wholly Shi'ite |
If you do close any, close ONLY the ones that have been open the least amount of time. Length of credit history is probably the biggest factor
in your credit rating, so you want to keep the cards with the fewest blemishes and the longest history (and best terms, if you actually plan to use them
occasionally).
A door is sometimes a jar, but a jar is never a door.
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Hordain Prima |
#8 | ||||
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Posts: 1333 03-20-08 9:06 PM |
^^^
That's a really good piece of advice.
"I got kicked off the high school debate team for saying `Yeah, well F#CK YOU!` I thought I had won. The other kid was speechless. I thought that was
what we were tryin' to do." - Ron White
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vizco |
#9 | ||||
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Posts: 3044 03-21-08 8:22 AM Raid Peon |
Believe it or not, the credit rating algorithm is so bizarre that your rating can drop just for closing accounts. Still, ten credit cards seems like a lot to
me.
 Harmony of Souls : My Quiver All this science I don't understand; it's just my job five days a week. |
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ellocopato |
#10 | ||||
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Posts: 3788 03-21-08 8:58 AM
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There's two things to worry about as well if Vantagescore is starting to be favored over fico
The VantageScore is based on six variables, versus the FICO score's five variables. Here's a comparison of the two: Vantage score Payment history 32% Utilization 23% Balances 15% Depth of credit 13% Recent credit 10% Available credit 7% Total 100% FICO score Payment history 35% Length of credit history 15% Amounts owed 30% Types of credit uses 10% New credit 10% Total 100% Here's a fico estimator: http://www.bankrate.com/brm/fico/calc.asp?lpid=BKRATE29
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Soygen |
#11 | ||||
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Posts: 7118 03-21-08 9:08 AM 100% Soybean |
Wait....how is Payn paying 9.95 for WoW?
I'm not givin' you attitude. I just want another drink.
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Kendien |
#12 | ||||
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Posts: 2559 03-21-08 11:09 AM Mera's Master |
3-5 working trade lines is what a good mortgage broker will tell you to have open. Ten hurts your score and so does 1 or 0.
Otherwise, the advice above is good. |
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Loxodon2 |
#13 | ||||
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Posts: 9344 03-21-08 11:11 AM |
Now is that on a per individual level? My wife and I have 10 combined, she has 4 and i have 6. Guess i should have mentioned that earlier.
Also does the same rules apply for credit accounts? (Like Dell or what not) or are those bad mojo? |
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Federiko EQ |
#14 | ||||
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Posts: 3288 03-21-08 11:30 AM You can never have too |
FICO weighs revolving credit lines (credit cards) differently than installment credit lines (mortgage, car loan, etc). Delinquencies on installment lines are
generally a much greater sin than the former, but removing them from your report once paid doesn't have as much of an effect on the score.
More importantly, stop asking the people who used to play on Prexus. Look here... http://creditboards.com/forums/index.php?showforum=43 |
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Hordain Prima |
#15 | ||||
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Posts: 1333 03-21-08 1:10 PM |
Fed raises a good point, I'm thinking that talking to a reputable Credit Councilor might make more sense if you're looking to make a significant credit
move soon (Home purchase, etc).
With Credit Lenders making moves like this and this, I'm wondering how quickly the evaluation of Credit as a whole will change in the short term - that was what I was referring to in terms of risk management above.
"I got kicked off the high school debate team for saying `Yeah, well F#CK YOU!` I thought I had won. The other kid was speechless. I thought that was
what we were tryin' to do." - Ron White
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Payn Bringer |
#16 | ||||
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Posts: 460 03-21-08 1:23 PM Slave of Suezb |
Wait....how is Payn paying 9.95 for WoW?I have l33t connections |
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