Credit Cards Key » CreditCardsKey » Bank Credit Cards » Just paid off all 7 credit cards, want to buy a house soon. Close accounts or no?

  #1 (permalink)
: We just paid of 10k in credit card debt today.
1 Discover
2 store accounts
4 Visas

We are trying to buy a house next summer, and want to have the highest score possible. Before paying off the accounts, our score was mid 700s. Should we leave some open, leave all open, or close most of them? I closed 1 already because it had a high annual fee. My bank will not give me advice about this.
Also: I have student loans and a car loan that are current and active on my credit report if that matters.
Also: I have student loans and a car loan that are current and active on my credit report if that matters.
  Reply With Quote
  #2 (permalink)
: leave oldest without an annual fee open
leave two regular credit cards without an annual fee open.
use one for a bill, such as your cell phone bill (small amount).
use the other one for gas in your car. pay the full amount when you get the bill in the mail.
keep the usage small and keep it active.
most people that buy a home have car loans and student loans.
it's credit card balances that really hurt your score
do not make any new loans before you buy your home. you're done.
  Reply With Quote
  #3 (permalink)
: Closed accounts remain on your credit report for at least 10 years, but they don't count as much as open active accounts.

Closing your oldest accounts will lower the average age of accounts which will lower your score. If the oldest is less than 4 years older than the rest of your accounts, it won't make much difference.

I recommend that you close some of those accounts. High annual fee is a good reason to close it. Keep two or three of the oldest major cards -- best rates, limit, rewards, etc. Also, dont' keep multiple cards for the same bank. Only keep the store cards if there's some discount advantage.

Close the accounts via letter and request written confirmation that the account is closed and 0 balance. Keep that confirmation forever.

You will have to use the cards you keep. Rotate them every few months. Use them for regular purchases like gas or groceries. Then pay the statement balance in full every month. This will continue to build your credit, keep the accounts active, and avoid interest.

You need the mix of credit cards with your installment loans (car and student loans) to get the best FICO score.
  Reply With Quote



Thread Tools

Similar Threads
Thread Thread Starter Forum Replies Last Post
old credit cards on my report....accounts I have not used in years. Should I close the account? Emis Best Credit Cards 2 07-08-2013 10:05 PM
how long after paying off cards should i wait to close the accounts? xolilshortii18xo Visa Card 3 10-15-2012 10:24 PM
Should I close my credit card accounts? Michelle Best Credit Cards 2 12-06-2011 03:06 AM
Is it a bad idea to close out credit cards and bank accounts once paid off? FrostedCookies Bank Credit Cards 3 10-22-2011 10:06 PM
Someone used my SSN to open bank accounts, credit cards, and house loan - none have showed up on credit report? Anthony Bank Credit Cards 0 10-01-2011 04:06 AM

Friendly Sites:

Copyright 2014, All Rights Reserved