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Credit Questions
It's always interesting during these challenging times to explore the many credit questions we get. With any situation you need to get as much knowledge as you can to make the right decisions for you.
Lets look at a few questions and answers that come across my desk:
Q -If I get a credit card and then never use it, is that good or bad for my credit rating?
A -the credit limit on the card may be factored in (even if you haven't used the account and have a zero balance) when a new lender tries to establish your credit risk. They may see that you have an open account and could theoretically charge things to that account that would then decrease your ability to pay back any other new debts. If you're applying for a home loan and you're trying to maximize what you can qualify for, you may want to close any open, unused accounts before applying for a home loan so they don't show.
Q - to get a better credit score do you close old credit cards that I do not use?
A -Closing old CC with a good history hurts your rating even if you don't use them. A factor that may make it OK to close older cards is if the outstanding available credit is hurting your debt ratio, then choose the newest to close.
Q - Does APPLYING for too many credit cards damage your credit?
A -Your credit score is based on several factors. The one you are asking about is not based on the number of cards, but the amount of credit that's available for you to use.
Q -If you have really good credit and you foreclose on a house does it destroy your entire credit or is it best to file bankruptcy instead of foreclosure?
A - Any interruption in payments will affect credit score. A bankruptcy will have longest effect. A foreclosure next A short sale lesser The problem with a foreclosure or short sale is if the house is upside down the uncollected balance is collectible in the future against you. In a bankruptcy Chapter 7 all debt is excused even a house.
These are just a few of the questions on peoples minds these days. Quite a difference from a few years ago, but these are the days we are in now.
About the Author Visit Don Richardo's Solution Hub for more information. Go through the Don's "Private Source List" to read about this subject and more. The Don says "You got problems I got Answers" and to get Don Richardo's updates and messages go ahead and subscribe, the boys will take care of Ya.
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