Last week I told you how applying for lots of credit cards at once can hurt your score. This week, what to do if you already HAVE lots of credit card accounts. The answer? Leave them be. ESPECIALLY if you are about to apply for a loan, particularly a mortgage. Reason being, one factor in your credit score is the ratio of credit you have been approved for versus the credit you have used. You want to have as much credit as possible and use as little as possible. It’s especially bad to close longstanding accounts, since “length of credit history” makes up 15 percent of your score, the third biggest chunk. Of course, if you are paying annual fees to keep cards open that you don’t use, you will want to close them at some point. What to do? Wait until a time when you are not about to apply for a loan, so that when your score goes down a few points, it will not hurt you.
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