Improving Your Credit Score: Closing Accounts Doesn’t Make a Bad History Go Away

If you have had a few problems in the past getting the bills paid on time and wonder how to repair the damage that it did to your credit rating, there are some things that you can do to start improving your credit. Through this article, you are provided with some basic tips and suggestions regarding steps you can take to improve your credit score in this day and age.

Common Misperceptions and Your Credit Score

Closing your accounts doesn’t make your old credit history go away although many people believe that it does. The best thing that you can do to improve your credit score is to get new credit and this time make sure that it is paid on time and can start showing a good reflection on your ability to be responsible with credit.

The Vital Importance of Payment History and Your Credit Score

Payment history is the most important factor in determining your overall credit score and actually represents about thirty five percent of the score. Whether or not this account is open or closed it will remain in your account history for many years. Recent history although, carries more weight than what happened a few years ago so by getting in the habit of making your payments on time is a perfect way to start the rebuilding process.
Overall, lenders like to see plenty of room between the amount of debt you have on your credit cards and your total credit card limits. Therefore, the more debt you pay off, the more the amount of debt decreases compared to your maximum available.

The Effect of Closing Credit Accounts

When you close your credit accounts it lowers the total credit available to you and makes any balances you have stand out larger in the final credit score calculation.
If you are trying to rebuild your credit and you have repaid your debts, you will want to apply for a new credit card. This will allow you to start building a good credit history. If you don’t qualify now for a regular credit card, you may want to check into getting a secured one in which you fund upfront and then charge on it. Also, department store or gasoline credit cards may be easier for you to qualify for as well as employee credit unions, so that you can start over rebuilding your future credit and ultimately raise your credit score.

Summary and Conclusion

By keeping these pointers and factors in mind, you will be able to take a number of steps that will have a very positive effect on your credit history and your credit score. You will be able to take steps that will improve the overall outlook of your financial life today and well into the future.