Gone without using credit cards for years. Applied a number of cards and received them. Some of the cards seem to be names that I'm now finding out aren't very good Providian, First USA and NextCard. Are there ramifications for closing accounts I haven't used or only used once? Also what are these "inquiries" I've been reading about here, and what is "FICO". All information anyone can provide me on being a good credit consumer I'd appreciate. I've been using credit cards for the past year and always pay my balances off in full. What assistance can anyone offer.
FICO is a credit scoring model that yields a score between 300-950. Most people fall in the 600-750 range on this scale. The factors that go into the credit score are complex. They include, among others, paymente history, balance to revolving limit ratio, length of account history, number of accounts and myriad others. Many lenders look at FICO scores or other comparable models to decide whether to grant credit and on what terms. If you want to know your score, you can get it at equifax.com. It is not clear whether closing too many accounts at once is a good idea. I have heard that closing more than 2 accounts during a six month period may have a negative effect on credit scores but I'm not sure this is true. For a person who carries balances, closing accounts may have a negative impact because it raises the ratio of balances to total available credit and this will lower a score. On the other hand, having too many open accounts can also be negative. To get around this, I would close one or two accounts every six months and keep balances low. Inquiries are requests for your report. They come in two varieties: hard and soft. Hard inquiries are generated when you apply for credit. Soft inquiries may appear on your report when creditors prescreen you for offers, your current creditors review your report, or you ask for your own report. These don't affect your credit score. Too many hard inquiries within a short time for revolving credit may impact negatively because creditors will think you are desparate. Only apply for credit that you need. One or two inquiries within 6 months isn't bad. As to whether a particular company is good or bad, you probably should rely on your own experience if you already have the card.
