Did you know that your credit score could drop if you close out unused credit cards. The credit bureaus figure out how much you owe and how much available credit you have. The more you owe the lower your score will be.
For example you have a Visa card that you do not use. It has a $25,000 limit. With all your credit card bills, mortgage, car bills you owe a total of $ 193,625 You have a home equity line and other credit cards that are not up to their limit. You have available credit of 280,000.
The credit bureau looks at 193,625/280,000. You have $86,375 in available credit
If you closed your home equity line and a credit card you now have 193,625 in debt and only 200,00 total credit.
The credit bureau can see you are about maxed out. They lower your credit score because you are a bigger risk.
Sometimes older people have tremendous credit scores because their mortgage is about paid off, they have credit cards but not much is on them. And they have a long history. They have a large amount of available credit so their score is higher.
For more on Michigan real estate, mortgages, credit and credit scoring feel free to go to my website www.russravary.com
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