Jul
I have a retail store credit card. I carry a very small balance on it from time-to-time to take advantage of their no-interest promotions. Well, a year ago I forgot to make a twenty-dollar payment while I was out of town and not getting my mail. My credit was hit and it really injured my score. The same thing happened this week with the same card. I paid the card off this morning but apparently I am just too retarded to keep track of more than a couple credit cards so I’m considering closing the account. But I wonder what's ideal… Should I try to “repair” my relationship with them by buying something else and making regular payments, or will that not help me? I’ve a mortgage and other credit cards (that I carry much more massive balances on), and I’m never late on them. So is it okay for me to close that retail store credit card account, or should I keep it for a while and try to show them that I'm not an idiot? What's going to help bring my score back up?
Answer:
If you’re carrying balances on other credit cards, do not close the account. A large part of your score is the ratio of credit card debt to available limits. Carrying balances of more than 30% hurts your score. If you close a credit card account, you lower your overall available limit which would increase the debt percentage.
The late payment is already dinging your score. Use the card occassionally and pay it in full. You need at least 24 months of consistent, on time payment to offset that late payment.
By the way, best way to get a quick score boost is to pay off those credit cards. Carrying balances on credit cards is always bad. Save the interest and stay out of debt. Only charge what you can afford to pay in full each month.
You might think about making a bill checklist to keep up with whether you paid the bill or not. A easy spreadsheet with your bills listed down the page and colums for each month across the page.
Answer:
Closing the account will not improve your score. The late payments will still be on your report. Keep the account open, especially if you’ve had it for a long time, just don't use it.
Answer:
Keep the account and continue to pay on time, don't miss anymore payment. And see if can ask them to delete this from your report, or give it 6 months or more of good payment history and try to dispute it with the credit bureau. Either way, continue to pay responsibly, this will help in your request to repair your credit. Closing an account is actually a bad hit on your credit report, especially since you’ve been delinquent with this account. Continue to pay on time will help your score rise eventually, it will not happen overnight, it takes time and patience. With paying on time, not going over the limit, and keeping your balances low (debt ratio) on all cards/30-40% of credit limit. You need to look at all the factors in determining why your credit is being lowered.
Answer:
It is much much better to keep the account open with a zero balance than to shut the account. Just having the credit helps your debt to high credit ratio and can eventually boost your score even if you don't use it. It shows that you’ve credit and are responsible enough to pay it off and not keep a balance. If you have a few accounts that you use every once in a while and pay them off right away that’s a good thing. Obviously it's not good to pay them late at all. But in the end it benefits you more to leave the account open and not use it than to shut it. Don't worry about buying something else with it because that won't make a difference. Just leave the account as it is. That’ll help your credit. Good luck! Book Mark it-> del.icio.us | Reddit | Slashdot | Digg | Facebook | Technorati | Google | StumbleUpon | Window Live | Tailrank | Furl | Netscape | Yahoo | BlinkList