What is my credit score going to be if I pay off the highest balance CC to avoid interest rate jump? March 20, 2010
Posted by Banking in : Credit , trackback
valentinzday asked:
I have recently been notified that my interest rate is going up because of an overdraft, but I’m considering paying off this card and closing it: it is one of my oldest cards. How would it affect my credit score? Any other suggestions for what to do? Thanks!
I have recently been notified that my interest rate is going up because of an overdraft, but I’m considering paying off this card and closing it: it is one of my oldest cards. How would it affect my credit score? Any other suggestions for what to do? Thanks!
Comments»
Everything else being equal this should not make much difference. The overdraft on the other hand is a bigger issue.
Why would you need to close it? If you don’t carry a balance then the higher rate will not matter.
If you are planning on closing it and then paying it off you will take a pretty big hit because you debt to available credit will be negative. If you are going to pay it off first, then close it you may lose a few points due to the average age of accounts. Most credit services provide simulation calculators to show what certain actions will do to your score.
Closing one of your oldest cards will affect you NEGATIVELY in two ways: 1) It will reduce your amount of available credit, and 2) it will shorten your average length of credit. Why not just pay off the card, then NOT use it if you are worried about a rate hike???
I think Paying off your credit cards are a great way. And actually the best way to go about it is to pay the full amount monthly for all credits that you have. Though, with what you have. Go ahead and pay it off. Now closing the credit will affect your credit score. It would probably lower your score, but how much is the real question. Remember you can always apply for a new credit card and open another account.
I think i have not much idea about it for more knowledge visit
best of luck .