What if we close all of our CC accounts and pay all of them off

[deesown]

We have been having some credit card problems over the years. Some of them being paid 30 days late some in collections. We plan on paying all of them (40K) by next month and closing all the accounts. We will have no more debt.

My question is how will our credit score be then when we try applying for a home loan or even a car loan? Will they take our history into account even though all our debt is wiped clean? Should we wait a while trying to buy a home?

We defenitly will never get another credit card again!

[nc73]

We have been having some credit card problems over the years. Some of them being paid 30 days late some in collections. We plan on paying all of them (40K) by next month and closing all the accounts. We will have no more debt.

My question is how will our credit score be then when we try applying for a home loan or even a car loan? Will they take our history into account even though all our debt is wiped clean? Should we wait a while trying to buy a home?

We defenitly will never get another credit card again!

Um were previously in BK? If so it will help some either way. DO NOT close the accounts. Your credit score is based on your balance and credit limit ratio. If you close it all you have nada. Your score will go way down. Pay it and leave most open if not all.

[nc73]

It is never a good idea to not have a credit card. Unless you have unlimited cash on hand, always keep one for emergencies.

[deesown]

Um were previously in BK? If so it will help some either way. DO NOT close the accounts. Your credit score is based on your balance and credit limit ratio. If you close it all you have nada. Your score will go way down. Pay it and leave most open if not all.

No we have never filed fo BK. My husband wants to close them all up, guess he doesn't trust me ( hicuup).

[nc73]

No we have never filed fo BK. My husband wants to close them all up, guess he doesn't trust me ( hicuup).

Just keep the account open but cut the credit cards up.

[SinkingFast]

Age of the accts and debt to limit ratio do play a big part in factoring Credit Scores. If you close the accts, you loose age on your Credit history and your Credit Utilization factor.

I'd second the motion to keep the accts open and reporting OK, OK, OK every month with $0 balance. Maybe use one once in a while for something you will pay half or in full when the bill comes. If you pay half, then pay the rest the next month.

Another reason to keep at least one CC is liability. If you rent a car with your Debit card, the car rental agency has access to your entire bank balance. Where as, if you rent on a CC, your cash liability will be limited the credit limit of the card.

We have CC's since BK and we don't use them. We don't carry them in our wallets. Any purchase made with a CC is a planned purchase. If we buy something via phone or over the Net, we use our Debit cards for payment.

One suggestion to keep you from getting into trouble with your CC's again is to freeze them in a block of ice. By the time they thaw out, the urge to spend is usually gone.

[deesown]

how about if i close all the Store cc's and just keep like Chase open.

How long before our credit improves after we pay all the CC's?

[SinkingFast]

If you really are gonna pay in full,........... Negotiate terms with your Creditors.

Tell them you'll pay in full if they will remove all negative comments from your Credit Reports. If they agree, tell them you want that agreement in writing. That could do a lot of work for you toward cleaning up your Credit right there.

Beyond that,............ Time heals all wounds. If you've got several other trade lines reporting on time payments, the Lates on the CC's will have less and less impact as time passes.

As far as the small accts,............ You really need 2-3 positive tradelines reporting for you for times when you do need other financing. If you've got a car loan and a mortgage, then one CC should be fine.

One thing I would point out about the store cards,......... Many times you get deals being a store card member that you wouldn't otherwise be offered. Like coupons for 10% off all shopping done in a day type thing. Something to consider.

[deesown]

If you really are gonna pay in full,........... Negotiate terms with your Creditors.

Tell them you'll pay in full if they will remove all negative comments from your Credit Reports. If they agree, tell them you want that agreement in writing. That could do a lot of work for you toward cleaning up your Credit right there.

Beyond that,............ Time heals all wounds. If you've got several other trade lines reporting on time payments, the Lates on the CC's will have less and less impact as time passes.

As far as the small accts,............ You really need 2-3 positive tradelines reporting for you for times when you do need other financing. If you've got a car loan and a mortgage, then one CC should be fine.

One thing I would point out about the store cards,......... Many times you get deals being a store card member that you wouldn't otherwise be offered. Like coupons for 10% off all shopping done in a day type thing. Something to consider.

Yes we plan on oaying them off all by next month. no we dont have any car loan or morgage, we rent.

Does that really work negotiating with a creditor about removing negative marks if you pay in full? I would think they would laugh at ya!

[SinkingFast]

All they can do is say "No". And it can't hurt to try. If it works, good for you!! If not,........... You're in the same boat you're in now.

But yes, it does work. Other folks here have done it successfully.

Creditors don't care about your credit reports. They care about their money. If giving a little gets them their money, they may well go along with you.

Just be sure to get a statement in writing that they agree to remove the negatives.

Also, since you rent,......... You may want to get an annual statement from your Landlord that you made all payments on time that year. Save those statements for the future when you do need to finance a car or a home. Many Lenders do consider alternate forms of Credit Reporting.

[jp2861]

I wouldn't close them all. Depending on how many you have you could close some and leave the 2 oldest ones with good ratings open. This should give you a long time line of credit history.

[MomIcantFindmy]

Hey Sinking!

One suggestion to keep you from getting into trouble with your CC's again is to freeze them in a block of ice. By the time they thaw out, the urge to spend is usually gone.

I absolutly love that idea!!! I am going to do it right now. That is such a cool (no pun intended) idea!!!