Does the AMOUNT of credit you have help your credit score?
Posted by | Posted in Credit Help | Posted on 06-07-2010-05-2008
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I was just today approved for a credit card. When I applied I thought it was 5.99 FIXED for the life of the loan and today I looked over the application again and its a 5.99 VARIABLE for the life of the loan. So that doesn’t really make it worth it (I’d get to nervous)
But I remember hearing (I think) that having UNUSED credit helps your score? Or should I just go ahead and cancel the card?
Keep the card if there is no annual fee, and since you should always pay your bill every month in full perhaps the interest rate is not too important. Don’t charge anything you won’t be able to pay for when you get your Statement each month. Credit card debt will eat your soul and drag you into debt hell if you don’t live within your means.
This is how people get top 800+ scores.
They get a credit card.
They use it for something they need like food or gas.
They pay in full each month.
By doing this you NEVER pay a penny interest.
47% of Americans use cards this way – they carry the highest scores.
You’ll never pay that APR rate – it could be 90% as far as you are concerned.
Yes, available cash on your credit cards shows that you can be trusted with money.
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Low credit utilization is what helps your score….ideally you should never carry a balance greater than 25% of your available credit.
The credit card will improve your credit score if you use it wisely. Don’t cancel it.
The interest rate doesn’t matter as long as you pay off all the charges that you charge before the statement close. When you get the statement pay it immediately. Don’t wait too close to the due date or you may find you will incur interest charges. You can sign up to pay your bill online by an ACH debit against your bank account. That way you can pay exactly on the due date every time.
Good luck!
get more details ; open the second & fifth link on: http://www.credit-report-4help.co.cc
You can use this credit monitoring service to pre-estimate future scores for different scenarios of such payments – credit-report-score.10001mb.com
I had a similar situation last year. save time by go through http://www.loansource.tk
Part of the Credit Score formula includes the number of open and active accounts. Not canceling the card can definitely help your score, but you may be subject to annual fees so be sure to read the fine print.
The best way to use this card to increase your score would be to carry a small balance on it for a short period of time, and then pay it off. Maybe pay a bill with it for a month or two, and just pay the minimum payment on the credit card. Then at the end of the third month, pay the whole balance off.
This will show an open, active account, which has also been kept positive.
Credit diversity is important too, so having a bunch of open unused cards won’t help you a lot. You generally only need one or two open active credit cards to see score increases. Other forms of credit such as loans and mortgages will also increase your score when they show a positive payment history.
No for me, the lesser the credit you have, the more chance to have a good credit score. Pay bills on time to gain high credit score.