Financial update - I took the plunge and closed a ton of credit accounts

[momee]

And my score, finally, is better than it has ever been.

 

I was careful to keep my oldest account open. We are under a relatively brand new mortgage so that old account and this new mortgage average average together to result in a poor rating in the "age of credit history" category.  Only time can fix that one.

 

Yes, it's true that closing them did cause a temporary score reduction (during which I panicked slightly) - so beware of that if you're about to get a new mortgage or other loan.  But once it rebounded, it did so exponentially.

 

It was only a couple months tops too and I just wanted to share it was a really great move.

Hope this helps someone out there who was listening to myths like I was.

 

 

Edited April 15, 2016 by momee

[Miss Mousie]

Steps in the right direction!  Well done, momee.

 

:thumbup:

[EndOfOrdinary]

Awesome! Good for you. In a day and age just after the recession, many, many people have less than desirable credit scores. More than likely it is not as bad as you might think. Well done

[momee]

I admitted a while ago on these very forums my issues with credit spending.  I'd open an account - department store - get 15% off for opening account, spend, idk, 50% more than I would have with cash.

 

I would then pay interest for the next year because I could only pay back $25 $30 per month.

 

My financial habits are vastly improved all around.  I've studied HARD and fought to change.  But mostly wanted to debunk the myth that closing an account will hurt your score.

Just sharing...

Edited April 15, 2016 by momee

[Tsuga]

And my score, finally, is better than it has ever been.

 

I was careful to keep my oldest account open. We are under a relatively brand new mortgage so that old account and this new mortgage average average together to result in a poor rating in the "age of credit history" category.  Only time can fix that one.

 

Yes, it's true that closing them did cause a temporary score reduction (during which I panicked slightly) - so beware of that if you're about to get a new mortgage or other loan.  But once it rebounded, it did so exponentially.

 

It was only a couple months tops too and I just wanted to share it was a really great move.

Hope this helps someone out there who was listening to myths like I was.

 

I have been considering that and it does help me. I'm thinking of closing one of my cards, actually. One I don't pay online. But we were thinking of buying a house and now we have. Anyway. :D

[Scarlett]

I have been using credit karma...I wonder how accurate it is?

 

My boss has my name on a credit card....I just saw he increased the limit on it. So far it seems to be helping me.

 

My score is only about 725. I want it back up to 790 like it was when I bought my house after my divorce, not sure it matters at this point but yeah I just want it. :)

[EmilyGF]

My dad opened a credit card for my when I was 16. It was a zombie card for years and years. Every time I tried to get a new credit card I would be denied because I had something like a $30K limit on that card. I wonder if they closed it that last time we tried... I think we "closed" it about five times...

 

It hasn't been used since 1998.

 

Emily

[RootAnn]

I actually closed too many accounts years ago & my credit score is lower because of it. So, beware of closing TOO many open accounts. Keep a few.

[momee]

That's strange, Rootann because I did the exact same thing, closed about 10 since last summer - I did it slowly over time.

 

My score increased.

Probably various other factors we aren't considering making each scenario different I guess.

I'm not expert obviously, just sharing since it's a common thing people have said to me - beware of closing the accounts.

 

Tricky and I'm sure it's all to the benefit of the banks, lol.

[ChocolateReignRemix]

I have been using credit karma...I wonder how accurate it is?

 

My boss has my name on a credit card....I just saw he increased the limit on it. So far it seems to be helping me.

 

My score is only about 725. I want it back up to 790 like it was when I bought my house after my divorce, not sure it matters at this point but yeah I just want it. :)

Credit Karma seems to run on the low side.

[RootAnn]

That's strange, Rootann because I did the exact same thing, closed about 10 since last summer - I did it slowly over time.

 

My score increased.

Probably various other factors we aren't considering making each scenario different I guess.

I'm not expert obviously, just sharing since it's a common thing people have said to me - beware of closing the accounts.

 

It has to do with the amount of credit you use (balance) over the amount of credit available to you (add all the credit lines up). Too much total credit available is a hit. Too much balance divided by your credit line is also a hit. I'm on the 'too much balance divided by total credit' side. My score fluctuates depending on how much I spend in a month. It never goes higher than a certain number, but recently dipped hugely when I had a large monthly spending balance. I could ask for my credit line to increase or open another account or two. I'd rather not open any more accounts, so if I want to improve my number, I'd have to ask for more credit from my one credit card, being careful not to ask for too much - since that would flip me over into too much total available credit. 

 

My DH didn't close his accounts when I closed mine. He doesn't use them, but they count for his available credit. He also spends a LOT less than I do most months.  :mellow: His score is better than mine.