I just graduated from college and would like to pay my credit cards down before I consolidate my student loans. I have about 9 cards in total. My question is should as I pay some of the newer ones off should I close them to have about 5 accounts. I have a couple gas cards a home depot 2 mastercard 2 visa an AMEX and a Sams Club card. I want my score to go up so I can get a better deal when I consolidate. Should I close them as I pay them off or wait until a couple are paid off then do so or pay them down to a better utilization ration then close a few. I am unclear in my best strategy. My credit is OK a 663 on myfico yesterday.
Consolidation will not increase your credit score, and you should never close any accounts. Try to transfer the balances from the low balanced cards unto a high limit card. If you do, just keep the now 0/zero balanced card(s) for odds and ends, a gas tank fill up here and there, and other small purchases.
I thought that too many revolving credit account is a detrimant to my score. I know consolidation of my student loans won't help but the 9 or so credit cards seems like it may be detrimental
Excellent advice, Greg! But I read elsewhere on the board that bankers frown on loan applicants with more than 3 major CCs. This is because the bank views your unused credit limits as "debt" that you "could use". Is this true? I have 4 major CCs, two with BOA (VISA and MC). I would like to either pay one card off and close it or transfer the balance of one card to the other and close it because I don't want creditors to see the $13000 in unused credit (of the card I transferred from) as $13000 "debt". I hope I'm not confusing you.
thats what I really was getting at. I have heard that a large number of open accounts is perceived as more of a risk. Each time I close an account does that hurt my score?
I would like the answer to that question too. Once a board expert answers that question, I will pay that card off and close it. I really don't need 4 major credit cards listed on my report. All 4 cards are in good standing, never late, by the way.
It depends on the age of the account. It is relatively new, then not really. If it is your oldest account, it will tank your scores. Despite contrary opinions, the typical bank doesn't care how much availiable credit you have. The FICO scoring model actually favors it in certain paradigms. Using to much is indicative of a high risk. I wouldn't close them. In addition, consolidating your loans will actually reduce your payments typically. On a manual review, that is better for DTI. In that sense, it can help you.
I have a lot more than three major credit cards. I've gotten car loans at 4.25%, conforming mortgages, and have no problem getting credit. If you're managing them well, I'd leave them alone.
so then it would be a good strategy to pay and close the newer accounts first. I just read on myfico that too many accounts is perceived as a threat.
You don't have too many accounts. You have a good mix, since you have some store cards, some gas cards, and several major cards. I wouldn't worry about it. I've got probably 5 or 6 gas cards, a dozen store cards, and six or seven MC and Visa as well as two AMEX. I've never been told I had too many accounts. Keep them in good standing, build your history, and you'll be fine.
