Detroit Nesties
Dear Community,
Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Credit Cards
My BIL (who is in Finance) said that if you have any credit cards, you should use them at least once a month. Do not cancel them at all. It will hurt your credit score. You should use your cards at least once a month or every other month, even if you only put $10 on it, it keeps it active. If you don't use your cc after so many months, then the company can close your account and your credit score can drop. Also, if you open any new cards, your credit score can change too.
DH & I were a little shocked when he told us that, but it makes sense with the way the credit card companies and banks have changed in the last few years.
Re: Credit Cards
I have put off cancelling two of mine for that very reason but they are from the same institution that two others are from that we initially got for points. We stay on top of our scores and are not overly worried about the hit at this point. Getting on top of our budget has made me what to simplify things.
This. A friend of mine was in the process of getting a new car. The car dealership ran his credit 6 times and it dropped. He was not happy. The dealership had to do something with the credit score to get it back up there. Needless to say, he was not a happy person and the car he was going to get ended up being sold to someone else 2 days later.
Married Bio with reviews | Our Journey
While this is all true, you also have to think about what is best for you. If you are not going to be able to control your usage or pay if off, it may not be wise to go with this. Closing out a credit card only minimally effects your credit score and it only lasts for a short time. And if you get a larger limit on the remainder of your credit cards it almost negates it because the negative effect comes from not having as much credit available to you.
This is true, however......
Cancelling does not necessarily hurt your credit score. You might take a small hit at that time, but your score can recover. There are MANY factors that go into your score. When I was trying to get out of debt, I strategically kept my 2 CCs that I had the longest history with, and closed out the rest. If you're racking up debt on the cards, it is better to cancel them than to keep them around and continue to charge things. If you have a higher credit limit on the cards and pay off the balance every month, it is not necessarily beneficial to have 5 cards vs. 2, for example.
It is more complicated than what you posted, but I won't go into the whole lecture.
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The two aspects of CCs that affect your score are length of accounts open and debt to available credit ratio. So you should keep your longest accounts open and you should also be sure not to close them (or give them a reason to close them) on you because of the available credit affecting the ratio. Like a PP said, if you are a spend it if you got it kind of person your ratio is going to be skewed either way.
I cancelled all but one cc and I asked for a letter from the cc company stating that I requested the account be closed. There was barely any noticable damage to my credit score, maybe a couple of points. And if I had to refinance or something, I could use the letters to prove that I chose to close the account, the cc company didn't close it on me.
Something similar happened to DH when he bought our condo. They got quotes for a mortgage from several places, one broker kept pulling his report over and over again until his score dropped so he wouldn't qualify for the best rate. His REA had to threaten the guy to make him stop. How freakin' shady!
This.
While you should open/close accounts all the time, it is sometimes beneficial to close an account that you do not need/use. Plus having an open CC leaves an opportunity for that account to be used fraudulently.
Some people struggle to use their debt responsibly, for them it's better to take the temporary ding and close an account rather than rack up more debt using the card sporadically just to keep it active.