Re: Someone fill me in on credit ratings...

Posted by Andrea (207.7.7.214) on September 12, 2002 at 16:48:04:

In Reply to: Someone fill me in on credit ratings... posted by CC Collector on September 12, 2002 at 15:48:06:

Your best strategy depends on several factors. First, if this happens to be your only credit card, do not close it out. These days, a credit card is pretty much an accepted and necessary fact of the modern world. Not only that, but having a credit card and using it responsibly -- as evidenced by the zero balance -- may actually work in your favor from the standpoint of justifying your creditworthiness.

On the other hand, if this particular card is just one in a big bunch, you may do well by closing the account. On average, Americans have about five bank card charge accounts reported on their credit lines. Anything more than that, and creditors may see someone who's overextended across too many credit cards. So, if by chance you do pay down your cards and you have too many laying around, it is a good idea to close out the ones you deem the least necessary. That way, your FICO score -- which is your overall credit score distilled into a three-digit number -- will be as high as possible, giving you the good-risk halo that lenders like to see.

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