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[steven787]

akuma587 said:

wangfoo said:

 

The downside of opening (and closing) many cards is that it tends to not work well with your credit score.

Twestern - You're right; I was just replying to the comment of never ever use credit cards.

 I actually did some research on what you said, because I was worried about the same thing, and that is only true if you have a bad credit history to begin with.  Closing accounts doesn't affect anything as long as they weren't delinquent, and the number of accounts you open is a very small percentage of your overall credit score, which, as I said, only changes your score if you do not have a good credit history.

Actually, even with good credit opening and closing accounts is bad.  This is thought of for four reasons 1.) Is a sign that you be abusing credit or about to abuse it. (Puts up a red flag) 2) Reflects amount of credit you have extended to you, with out increasing the amount that you have borrowed and then paid back. (another red flag) 3.)Every time you close a non-secured account, before the renewal period or before maturity, points are taken off you credit score.  4) Everytime you open a credit, you get points taken off. 

The score isn't the only thing that is looked at when approval or interest rates are pending.  Just because you can get approved for anything doesn't mean you have good credit, these types of events on your record look like a reason for creditors to give a higher interest rate, so that they ensure that they make money off of you. This is why paying debt off early is bad (for credit, while can be better for you in the long run for other reasons) if you pay a car off early the bank made less money off of you, so when the bank sees this on there you might get a litle extra interest tacked on there.

Here is a good place to learn about credit history, credit score and your credit report.  If anyone would like more info feel free to send me a message, I have a lot of experience dealing with FICO and creditors (and debtors!)

Also the Federal government (the FTC in particular) made it law that you must be allowed to look at you credit report (but not your score) for free once per year.  So Experien, TransUnion, and Experian reports are all available for free at www.annualcreditreport.com, it is complete non-profit and does not require a credit card.