Your own personal credit FAQ

Your own personal credit FAQ – I get a lot of questions at Credit Rescue Now, Where we counsel consumers about financial landscape and how to make sure their credit remains strong and sound. I thought it would be helpful to put together a list of frequently asked questions and answers. I hope this information is helpful.

Q. Will it hurt my credit score to close my credit card?
A. Yes it will. A total of 15 percent of your credit score is length and history, so by closing the account, all history you have built up is gone, thus dropping your credit score. If you close the card with a balance you will lose additional points because you have dropped an account with a balance. Just pay the card down to zero and charge something very small once every four to six months and pay it off. This will preserve your credit score.

Q. Why did my credit score go down when I paid an account which was a collection agency?
A. When a collection account is paid it does drop the credit score because it updates the Profit and Loss date, date of collection and date of last activity. You still need to pay the account if you legally owe it and all your information is being reported correctly to the reporting agencies.

Q. My credit card company has lowered the credit limit on my card as I bring my balance down. Why?
A. All credit card companies practice damage control and will review how you are paying your other creditors. If you’re maxed out on all your credit cards, or have new delinquencies and new collection accounts on your credit report, creditors will start lowering the limits and even close your credit card accounts even if they have never been paid late. This is how they control their losses. Just get everything in good shape on the credit report, then call the credit card company back and ask for a review of the credit request they stop lowering the credit card limit because it is hurting your credit score. Remember, a credit card at its limit is 30 points off of your overall score.

Q. I was told that if I pull my credit many times for an auto or home loan, as long as the credit was pulled in a 30 day period for the same thing, that it would not hurt my credit score. What are the facts?
A. this is not true. We found that six inquiries a year will not hurt your credit score. Past that, ten percent of your score will be affected, so plan your credit pulls.

Q. What constitutes a delinquency on my credit report? How late to be to affect my credit score?
A. A lot of clients have advised me they were told by their bank they have to carry a small balance to help there score. This is not true. If you charge on this card, this is a transaction that you pay off when your statement comes in. This is an update to your report, and then your last activity will be updated. It is the best to pay your balance off every month.

I hope this information was helpful to you all. Till next time, good credit to you and remember we have a free workshop with free credit manuals on the second Saturday of every month.

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