For most of us, using a credit card has become a way of life. To improve our credit score, or keep our credit score high, and keep those credit cards available remember what NOT TO DO!
1. Seek a lower rate. Although asking for a lower rate can be a good thing sometimes, keep in mind that when you ask for a lower rate, credit card issuers will often check your credit score or credit report or even question you about your financial situation. Once you ask for a lower rate, companies will often treat you as if you are a new customer and check your most recent credit history. If you have had any credit problems that show up in your credit report, this could actually cause your credit limit to be lowered or your account closed. To prevent this, check your credit report before you ask the credit card company for a lower rate.
2. Close your account. If may seem that closing your account would improve your credit score, but it may not. Credit bureaus use the information from these creditors to track your information and give you a score. When there is too little information, it will actually cause your score to decrease. Closing an account will not remove any information from your credit history right away. It can take up to 7 years for delinquencies to get off your record. In addition, credit bureaus use the information they get from your credit report to figure the "debt-to-limit ratio". When you close an account that already has a zero balance it will cause your available credit to decrease which raises that debt-to-limit ratio. Instead of closing the account you owe nothing on, consider reducing the balances on other credit card accounts.
Remember that a lower credit score makes it more difficult to get a loan for school, a car, or a mortgage. Keep your credit score high and you will increase your chances of getting that much needed loan next time you want to buy a car or a home.
Read more from this Tulsa World article "Safety in the Credit Card Ring", here.
To buy or sell a home in the Tulsa, OK area, contact Kelly Howard of McGraw Realtors at 918-230-6341 or www.kellyhowardhomes.com
1. Seek a lower rate. Although asking for a lower rate can be a good thing sometimes, keep in mind that when you ask for a lower rate, credit card issuers will often check your credit score or credit report or even question you about your financial situation. Once you ask for a lower rate, companies will often treat you as if you are a new customer and check your most recent credit history. If you have had any credit problems that show up in your credit report, this could actually cause your credit limit to be lowered or your account closed. To prevent this, check your credit report before you ask the credit card company for a lower rate.
2. Close your account. If may seem that closing your account would improve your credit score, but it may not. Credit bureaus use the information from these creditors to track your information and give you a score. When there is too little information, it will actually cause your score to decrease. Closing an account will not remove any information from your credit history right away. It can take up to 7 years for delinquencies to get off your record. In addition, credit bureaus use the information they get from your credit report to figure the "debt-to-limit ratio". When you close an account that already has a zero balance it will cause your available credit to decrease which raises that debt-to-limit ratio. Instead of closing the account you owe nothing on, consider reducing the balances on other credit card accounts.
Remember that a lower credit score makes it more difficult to get a loan for school, a car, or a mortgage. Keep your credit score high and you will increase your chances of getting that much needed loan next time you want to buy a car or a home.
Read more from this Tulsa World article "Safety in the Credit Card Ring", here.
To buy or sell a home in the Tulsa, OK area, contact Kelly Howard of McGraw Realtors at 918-230-6341 or www.kellyhowardhomes.com
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