Well unfortunately, I wanted to boost my credit score by having my wife get me an American Express everyday credit card on her account. I was very naive when I received it not really knowing that she had used 97% usage of $1000 limit, but paying on time every month. Well I have a credit score of 525, and it took it down by 30 points. What shall I do, close the card or just hang on to it, I need help with this. I was just starting to pay off my collection’s and etc. Please someone give me some advice. Thank You!

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I found out that my credit score went down after I paid off my credit cards and then closed those accounts.  I was shocked that happened;  I believed that my score would increase, since I showed fiscal responsibilty and restraint.  Apparently, credit card companies prefer us to owe lots of money.  So now my report shows my only open card, which is just a few years old.  I learned a valuable lesson the hard way.

Merrie Hammond posted:

I found out that my credit score went down after I paid off my credit cards and then closed those accounts.  I was shocked that happened;  I believed that my score would increase, since I showed fiscal responsibilty and restraint.  Apparently, credit card companies prefer us to owe lots of money.  So now my report shows my only open card, which is just a few years old.  I learned a valuable lesson the hard way.

This happened to me also but it was like 70 point drop. 5 years of perfect payments on 3 cards but was paying that monthly service fee and huge annual charge that bad credit people start with. Closed it down and still paying the cards off on time. They slammed my credit. Another was a secured card I didn't need that option anymore to get a card and they would not upgrade my account to unsecured with only 1 late pay ever. Another bank where I had 2 cards then closed me for being over my limit after those planned closures. History was paid with only 1 late pay over 4 and 5 years, respectfully.

WELL, now I can't even get a bad credit type of card or loan. Still, have 2 years til BK drops off. Now, these cards are offering me discounts on paying off the closed balance and I'm grabbing those and paying everything off to $0.

Learned a hard lesson that I just want to share. Don't fall for those bad credit cards there is no exit plan to keep your good payment history.

 

I would recommend getting a copy of your credit report, which you can get free each year through Experian, where you don't have to enter a credit card # to get it. This way you can see if there are any errors and get them fixed.

I also recommend Credit Sesame, which I use - it shows you top actions to increase your score, your credit analysis with info on what affects your score, and more. I don't suggest closing the card, because that can negatively affect your payment history if you made on-time payments, your credit usage because the amount of credit available to you will decrease, your credit age because it won't account for how long you had that card (even though that can affect the score negatively at first, but will improve with time, and your account mix because it won't include that type of account. But look at every tip and trick you can find before deciding what to do so you can see what might work for you.

I use Capital One Credit Wise as well as another tool. It has a credit simulator you can use to see how certain things may impact your score.

Of course if it's doable, pay off every credit card in full every month so you don't pay interest and also boost your score. If not, I recommend paying more than the minimum payment, even if it's only $1 more. I do this on cards where I have 0% interest so it shows I always pay more than the minimum every month, and this has helped increase my score. Also maybe it's more manageable for you to make small payments every week or two instead of just paying monthly. And keep in mind it usually takes a while for changes to catch up and update your credit score. I believe it is 2 months.

My situation isn't the same as yours because I'm sure I've opened cards or done other things in the past year that you might not do, but my score last November was 718 and now it's 744. Hope this helps!

Thank you for the valuable info that you gave!  I will follow up, as soon as our situation regarding power shut offs in California improve.  We have been shut off 2 times (so far, with another coming in ~12 hrs) due to raging fires.  I am fortunate to live along the Pacific Coast and away from any current fires, but PG&E are being extra cautious for now.

Merrie

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