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Improving Credit Score |
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Dear Edith, I have several credit cards, one credit limit is as low as $400. Would I be better off, to improve my credit score, transferring all of my credit to one card and closing the other accounts? |
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The advice in this matter has changed in recent years. Now you get extra credit on your FICO score if you have un-used credit. They make a ratio of what balances you're carrying compared to how much credit you could be using. The less you're borrowing, as a fraction of what you have available, the better your score. So your best bet is probably to keep those cards with zero balances on them. Taking out a new card, though, could actually hurt your score. That’s because a recent request for new credit can count against you. It’s the old cards you want to keep. |
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Edith
Originally published on September 6, 2006 |
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