credit report - Credit Score Lowered When You Cancel Credit Cards

Most people are aware that anytime they seek a loan, the lender will check their credit report to see if their credit history warrants such a loan. Along with the credit report, the lender will almost certainly check the borrower's credit score. Also known as a FICO score, this score is a three-digit number, ranging from 300 to 850, that represents the borrower's overall credit worthiness. There are several factors that come into play in compiling a credit score. The score takes into account available credit, any past due payments, and the length of the borrower's history, among other things. Also coming into play is the amount of available credit that the borrower has, along with the percentage of the available credit that is currently outstanding. Borrowers often check their credit reports themselves prior to applying for a loan in order to look for possible errors. Often, they will see old accounts listed that they didn't even know were active anymore, such as a department store credit card from a city in which they no longer live. The first response in this situation is usually to cancel the account, since it isn't being used anymore. This could be a mistake, and could actually lower your credit score! It is true that it may be a potential problem to have too much available credit. Lenders could have concerns that the borrower with ten credit cards might run out and max them all out. On the other hand, a very important component of the credit score is the length of the borrower's credit history. The longer the better and those people with top credit scores usually have histories of thirty years or more. By canceling an old account, you could be reducing the length of your credit history, which will then consist only of newer accounts. There are times when canceling unused accounts is a good idea. This is particularly true if the accounts are relatively new ones. But closing an old account, even if it isn't being used, could do more harm than good for someone seeking a loan. ?Copyright 2006 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a site devoted to personal bankruptcy, debt consolidation, establishing credit and credit counseling. Article Source:http://EzineArticles.com/?expert=Charles_Essmeier credit report - Finding The Most Desirable Credit Card Deal With increasing competition, credit card companies have been trying to differentiate their products and come up with the best credit card deals. For consumers this often means competitive interest rates and a great variety to choose from when it comes to applying for a credit card. You can also get credit card deals from banks, department stores and even oil companies. It is important to find the right credit card deal that is well suited to your credit needs. Each card offers a different combination of features and options such as APR, reward programs, personalization, online access to statements, etc. There are certain factors to keep in mind when researching credit card deals. To get the right credit card it is important to compare credit card deals. Credit card companies often send out a lot of mail to entice people to sign up. Comparing credit card offers means looking at the variety of options available to you and not settling for the first attractive credit card brochure you get in the mail. One convenient way of comparing credit card deals is to research online. An important part in choosing a credit card deal is to look at the APR offered. The APR or annual percentage rate states the rate at which interest will be charged on your credit card balance. The APR can vary greatly from one deal to the next. Reward programs are another important consideration when it comes to selecting a credit card deal. Also it is important to acquire a credit card deal from a reputable and well know company or institution. Credit card use has been on the rise for all age groups. Whether you are a student or a working professional, a credit card can provide you with many benefits. Students have to choose a credit card deal earlier and earlier in today's world. Financial education and money management skills can help them select the best credit card deal for them and how to use credit wisely. Find the right credit card deal can mean saving a lot of money over time and being able to reap benefits from its reward program. Also it takes you on your way to building a solid credit history report, which can be beneficial when you need to take out a loan in the future.