I've finally consolidated my debt into a low interest consolidation loan and still have several credit cards ranging from credit limits of 200-6000. Which cards should I keep and which should I cancel?? I'm trying to establish good credit and have finally got my spending under control. I know there is a fine line between too many cards and not enough. Here are the ones I have open and the credit limits. Which would you close?? Best Buy 1700 Sears 2000 Plat Visa 2000 Next Card 6000 Dillards 1700 Target 200 Capital One Visa 200 Capital One MC 200 Aria 500 Amex (No limit-Pay every month) Fashion Bug 500 I'm thinking of cancelling my Capital Ones, my Aria, my AMEX, and my Target. What you guys think? I'm wondering if I should keep them all open and when my credit is better, they will up the limits. What experience do you have with these companies up their limits over time? and if they do, How much "potential" credit is bad for your score?? THANKS FOR THE INFO!!!
You need to consider which is your oldest tradeline at this point. If your CapOnes are new, I'd close them. Get rid of Target (since you have Dillards, that's your dept card). Definately keep Amex and Nextcard (high limit). I'd get rid of Fashion Bug also. You also need to consider what the interest rates are on your cards.
Best Buy 1700 Sears 2000 Fashion Bug 500 Dillards 1700 Target 200 These 5 are store cards, not credit cards and whether or not to keep or close should be a separate decision from which credit cards to keep or close. **************** Plat Visa 2000 Next Card 6000 Capital One Visa 200 Capital One MC 200 Aria 500 Amex (No limit-Pay every month) I think you should keep all of these. You might want to look at a webpage I have up and see what you think. My thoughts might or might not be something you want to do, but what the heck, you can at least have a look see. http://www.creditwrench.com/creditsense/index.html
I'm thinking of cancelling my Capital Ones, my Aria, my AMEX, and my Target. What you guys think? I sure would not cancel the Amex. *************** I'm wondering if I should keep them all open and when my credit is better, they will up the limits. What experience do you have with these companies up their limits over time? and if they do, How much "potential" credit is bad for your score?? THANKS FOR THE INFO!!! Potential credit is not what they are likely to look at so much as how much of your credit potential you are actually using. If you are using, say 25%, then that is going to be good for you whereas if you are using say 80%, then you are in trouble. These companies will probably increase limits for you over time and that would better your ratio and thusly your score. would increase. You have about half as many cards as I do and I use them heavily. Right now, my usage is up around the 80 to 90 percent range. So I am working on getting higher limits in order to decrease my usage/potential ratio. Getting higher limits isn't going to change my spending habits and I pay off all my cards in full every month. There are other ratios that are important too, but I don't think closing any of your accounts or cards is going to help you any. What will help you a lot is paying them off in full every month and getting higher limits. Those are my thoughts
I see...So, its not how much you have, its how you use them....Before my consolidation, I had all my cards maxed out and my credit score was 681 w/o any late payments or negatives on my report, I'm hoping with my consolidation, my score should skyrocket...(or thats the hope)
Well, I'm not all that knowledgeable about this FICO score thing myself. We have plenty of people in this forum that are much more knowledgeable on the subject than I am, but I'm going to guess that your score will go down for a little while until you have made some payments on the new debt and also show that you are handling it well. All in all, if a potential new creditor had all the facts and knew that you had done a consolidation loan, that would not sit too well because it would tend to say that you had mis-managed your credit and had to do a bail-out of sorts. But once you showed that you were not going back into debt head over heels and were handling your new debt in a responsible manner, all should be just fine and your score should improve. Like I said, I'm not much on the scoring and how that all works, so don't be too surprised to find that others disagree with me. If they do, then I'd advise you to listen to what they have to say on the matter over my comments because I'm just guessing.
Well, my actual "consolidation" loan is going to show up as a Student loan on my report. I'm just using the money to pay for school and to pay to consolidate. I'm hoping since it will say a student loan rather than a personal or consolidation loan, this will not affect my score as you say. I have read in other places that consolidation loans do lower your score, but I'm hoping in my case it won't...I hope that makes since..(too early in the morning on a monday)
In that case I think it should work. Shuffling around revolving debt doesn't do a thing for you, but moving it into an installment loan should do the trick. My best guess is that you'll get a little drop for several months while the loan is new, but after that you should be above 700. Now assuming you get all your revolving balances down to 0 I don't see an urgent need to close accounts. You could get your score at that point and see if it's your top reason code, but I bet it won't be. But really, scores are so inscrutable, do what's right for your financial health and don't worry about your credit health so much unless you're buying a house in the next couple years. If you're able to lower your interest payments this way then go for it. For thoughts about student loans in particular I'll turn you over to anyone but me -- I never had any.
I would kill the two Cap. 1s, the Aria and all of the retail cards except one. Then apply for a high limit card from Citibank, MBNA, Discover or Amex Blue. It seems that you would qualify for any of them. This will help you maintain a good balance/limit ratio on high limit cards which in turn will attract other offers at good rates.
