New to this forum and my first message; a question concerning credit cards and credit score. I have had multiple bank and store credit cards for over twenty five/thirty years, with very high level of credit limits (bank cards in 20 to 25k range). I use my credit cards for ALL purchases, around 1,500 - 2,000 a month, and all credit card balances are paid in full every month, with no revolving balance. The only debt I presently have is a home mortgage and a home equity line of credit balance. I do not have any other kind of debt with anyone else. I have NEVER been late in making any payments. However, I recently discovered that due to a billing dispute with a utility company about five or so years ago there is an adverse item in my credit report. Since then I have been working with the credit agencies trying to get this adverse issue resolved. I was also told that this adverse item should be deleted from my credit report sometime next year. I estimate that this one adverse item has affected my credit score by about 40-50 points. I was wondering that since I do not really need all of the credit cards I have, would it help or hurt my credit score if I close a few of my credit card accounts. Even though I do not foresee any need for any large new borrowing, I would still like to see my credit score much higher than it presently is. Would appreciate any helpful insights/opinions. Thanks.
Thanks for your reply. I usually use three or four different credit cards during a month, rotating among all the cards I have, and pay off all statement balances in full by the due date. From your reply am I correct to understand that carrying a "1% balance", instead of paying off all balances in full, would help increase my credit score? Could you please elaborate a bit. Thanks.
If the cards you are using report a balance when they update the CRAs, it's better (typically) than having a zero balance. The logic is, the CRAs don't know if you are just not using the credit because you don't want to; but the fear is that you are 'stockpiling' credit and the first time things get tight, you'll spend your way through all of the credit limits, because they're not showing responsible usage. The sweet spot may vary, but typically it's within the 1-10% range. So if your current way of doing things results in a balance being reported on your credit report, you will be ok, but you want to make sure that there is some balance being reported to see how that changes your scores.
