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Originally Posted by Key
just some quick clarification questions ..
1) regarding the payment history... does that mean that you can pay simply the minimum each month and it won't hurt your credit score? that you would just have to pay the interest from the credit card?
2) the balance.. say you spend $500 in credit. you pay it off in full after you receive your bill, and after the "snapshot" has been sent to the CRA saying you had a balance of $500. next month, you spend another $500. is that the same to the CRA as: instead of paying off the $500 in the first month, you only pay $20... bringing the balance to $480. you spend another $20 to bring the balance to $500 again.
3) less unsecured credit is better... so does that mean a $200 credit card is better than a $2,000 credit card? if that's the case, would it make sense to request your credit line to be lowered to the lowest minimum possible?
4) if i wanted to close an account or two... does it matter if i haven't had it for very long? should i hold onto them for a while before i close them, or will it look bad if i close them very quickly after getting them?
thanks !!
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1)Yep, as long as your payment is on time, it will help your credit no more or no less if you pay the minimum payment or pay additional funds each month, providing that the balance of the credit card is under 50% of the limit.
2) Yes, unfortunately, it would look the same to the Credit Reporting Agencies.
3) It depends on what you keep your balances at, and if you have enough cash saved up for any emergencies that would arise. It makes sense to have a lower limit if you know, for certain, that you won't need to charge more than 50% of that limit. Ideally, you want to have a balance less than 35% of the total of all your unsecured credit limits. So, if you have a grand total of $1000 total with 2 different credit cards, you wouldn't want your total balance to go over $350.00.
4) It likely won't really affect much of anything. Obviously, if you can have accounts open for a longer period of time, it would help your credit, but if you are going to just close it anyway you may as well get that out of the way, as long as you have enough reporting tradelines to not damage your score due to lack of credit.