When trying to clean up your credit is it better to close an account before or after paying off the bill?
Answer:
DO NOT CLOSE YOUR ACCOUNT!!
Take a little time and go to http://www.myfico.com
This is the home site of the folks who developed the fico scoring system. There are lots of consumer info pages here, and hints on how to improve your score.
You do not want to close accounts unless you have over 3-4 credit cards, or the cards have a very large credit limit. Closing a card will remove a prortion of your credit history and lower your debt/credit ration.
Therefore, if you close a card you will actually hurt your score, not help it.
Just pay off the bill and put the card away for emergencies. If your problem is self control, then destroy the card. You may even consider calling the company and lowering your credit limit to $200.
But do not cancel the account. Do your research and go to the link above. If you still think it's the right thing to do, then cancel it.
To the credit card company it doesn't matter. They're concerned only about payment and profit margin. But to the consumer, it may be good to close the account so as to remove any temptation to continue using it. That's about the only difference really.
To work on ways to improve your credit score, take a look at the following website from CNN Money:
http://money.cnn.com/2002/02/15/debt/q_f.
Pay off the bill first then close the account. If you close it, it may be send to the credit company for recording and then they may charge more. I suggest you pay all bills and if you want to open an account, make sure that you spend lil by lil and pay then as soon as u spend. I know a woman who use credit card and not cash.. The day she use her credit card.. she goes home and total it up and send the bill out before they send a bill to her. She said that is the best method of having a good credit.
i don't know anything about a fico score but i would close the account and pay off the bill so i wouldn't make any spontaneous purchases.
Neither - Just pay the bill off and if the credit company has not canceled it leave it alone. Doesn't mean u have to use it but looks bad if you cancel, looks like you don't trust yourself to have it .
If you've had the account for awhile, pay off the bill and don't close it. Don't use the account (if it's a credit card, cut it up!) if that's what go you in trouble in the first place. Your FICO score is partially based on the # of accounts you have open, current status of each and how long you've had them. The creditors are wary of people who have a long list of short-term accounts (like opening/closing credit card accounts to transfer balances). Keep a couple (1-3 max) major credit card accounts open with a low/no balance.it tells lenders you are a responsible borrower and may see you as a good credit risk in the future.
And don't forget to pay all your accounts on time. Nothing destroys your credit faster than late payments!
It really doesn't matter. However if you close the account, you can no longer negotiate the interest rate with the lender.
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