My Way Credit

As you can likely tell by now, credit repair is not one
magical solution but rather lots of relatively small things you can do to help
repair your credit. To make sure that you don’t over look any one thing, you
may want to develop a to do list that you can post and check off.

You may list credit accounts you need to close, accounts
you need to pay down, people you need to contact, and things you need to check
out or research. As you tick off each item, you will get a real sense of
accomplishment knowing that you are taking steps to improve your finances.
Keeping a credit repair checklist posted will also keep you on track and let
you know what you still need to do.

This seems like a contradiction, but it really is not.
Many people think that to improve their credit score, they just have to pay off
some debts and close their accounts. This is not exactly accurate. There are
several reasons to think carefully before closing your accounts.

First, if you close an account you need (for example, if
you close all your credit card accounts) then you will have to reapply for
credit, and all those inquiries from lenders will cause your credit score to
actually drop.

Secondly, most credit bureaus give high favorable points
to those who have a good long-term credit history. That means that closing the
credit card account you have had since college may actually hurt you in the long
run. If you have credit accounts that you don’t use or if you have too many
credit lines, then by all means pay off some and close them. Doing so may help
your credit score - but only if you don’t close long-term accounts you need. In
general, close the most recent accounts first and only when you are sure you
will not need that credit in the near future. Closing your accounts is a bad
idea if:

1) You will be applying for a loan soon. The closing of
your accounts will make your credit score drop in

the short term and will not allow you to qualify for good
loan rates.

2) Closing your accounts will make your overall debt
balance too high. If you owe $10 000 now and closing

some accounts would leave you with only $1000 of possible
credit, you are close to maxing out your credit -

which gives you a bad credit rating.

In the short term, closing accounts will lower your
credit score, but in the long run it can be beneficial.