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My husband thinks it is better to keep a credit card we never use. he says it will help our credit score? |
My husband thinks it is better to keep a credit card we never use. he says it will help our credit score? Actually, it can. This is because your credit score is impacted by the length of your credit relationships (how long you keep accounts for, etc.) and the relationship of your available credit to your total credit limit. If you have a credit card that you don't really use, it won't have a balance, which means it's improving your available credit ratio. It's also increasing the age of your account, which also helps your score. It only helps your credit score if it's used and paid off every month..Use it at least once a month on something you know you can pay off..Plus it's good to have an extra one on hand for a big emergency. Not if your looking for a loan. Every dollar of the limit on the credit card, whether you've used it or not, will be considered a liability and so reduce the amount you may borrow. Calculators. Its better to get rid of all the credit cards and stop worshiping at the alter of the almighty fico score( I Love Debt Score). To have and keep a high I Love Debt Score you have to pay lots interest and pay it often. Thats when the bank wins and you lose. Did you know some cards have an inactivity fee? Did you know that the grace period on cards are getting shorter. used to be 30 days now the average is 23 days and some cards are only 20 days. google a search for credit cards and there fees Save for an emergancy. six months of expenses in a saving account. go to daveramsey.com and listen to his talk radio show. Lots of good advice on money and debt. He has been to the bottom and back. who can it help your credit score if its not being used... if you want to help you credit tryusing it once a month to buy something not too expensive though and once you get the bill just pay it off or if you dont plan on using it at all shred it up! =) Do not close positive accounts even though you no longer user them or they have a $0 balance. If you close an account, your total credit limit will go down, increasing your debt to credit limit ratio. Another reason you shouldn't close accounts is that you might reduce the length of your credit history if you close a card you've had for a long time. Since the length of your credit history can have a positive impact on your score, you should only close the card if you are paying annual charges or other fees. |
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