A very common myth and people who believe this end up closing accounts.
The important thing to remember is that 15% of your credit score is based on the average age of your accounts. The more accounts that are older results in your having a better overall age of accounts and this will have a positive effect on your score. So never close an account (especially an older one) as this will negatively impact the weighted average of all your accounts.
Also keep in mind that 30% of your score is based on Utilization rate...a ratio of how much your existing revolving trade lines (not installment or mortgage loans) are used. For instance two years ago, an individual who was borrowing $4,000 against total trade lines of $8,000 was said to have a 50% Utilization Rate which had no negative impact on their score. Today, the scoring model has been tightened up and people with Utiization rates of greater than 25% to 30% are experiencing a drop of between 50 and 100 points in credit score. They have two options to correct this problem...pay down the amount of debt being borrowed or increase the amount of trades lines. In most cases, people don't have a lot of extra money to pay down their debt so they are forced to find new tradelines.
Our clients are able to get a Guaranteed $5,000 line of credit which will add somewhere between 50 adn 120 points in about 45 to 60 days...a very useful product for boosting your credit score quickly when wanting to qualify for a home or auto loan and get a lower interest rate. For more information on this product, call me or go to www.easynewtradeline.com
Visit Great American Credit Repair for more information on how to improve your credit score.
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