Closing Accounts regarding credit reports

Closing Accounts

There is a myth that if you have several credit card accounts and close some, your credit score will
improve. Also some say that if you have too much credit, it's not good for your credit score. That is
absolutely untrue. The fact is that having too much credit debt is bad for your credit score.

Whether or not you should close any credit card accounts solely depends on your situation. If you need to close credit card accounts in order to help eliminate debt, then this should take priority over everything
else. Solving debt problems will help your credit, not to mention your life, in the long run. But if you are
able to budget your finances and pay down your credit cards, do keep them open. The goal to improving
your score is to have as much available credit as possible. The major factor to your credit score is your
available credit to debt ratio. Basically the more available credit you have, compared to the debt that you
owe will play a big role in your score.

You should close credit card accounts only if:

•     You need to eliminate debt and get your life back on track.

•     Enter into a debt consolidation program (same as above)

•     Keep yourself from continued spending.

•     If the account has very high interest and you're having difficulty paying it down.

Other than that, you should leave accounts open so that when you pay down the balances, you will
increase your available credit. Having substantial available credit while maintaining low balances on
credit cards or lines of credit will raise your credit score. This will also assure the lenders and creditors
that you possess responsible financial behavior.

Adding Accounts
As discussed previously, your credit file may not show all of your accounts because not all creditors report
to the credit bureaus.

If you have ever been denied credit due to insufficient or no credit file and have accounts that don't appear
in your files, you can ask your creditors to add this information to future reports. Although they are not
required to do so, many creditors will add verifiable information to your credit files for a nominal fee.