Credit cards and what they may or may
not do to your credit score are always a big part of what beginners and skeptics alike want to know.
Charge card users may see more
damage done to a credit score and higher penalties for missing a payment, than if he or she had applied for a credit card instead.
While we've discussed the fact that opening a new credit card account probably doesn't impact your credit score (and actually could help it), I've never see anything on what closing a credit card
account does to a credit score.
While it is true that filing bankruptcy is the most detrimental thing that you can
do to your credit score because it demonstrates your willingness to abandon your responsibilities to your lender, it also gives you a clean slate upon which to base your credit future.
However, compared to the damage
done to your credit score by carrying a large debt burden for a long time, and consistently missing payments and upping your interest rate, it's a decent trade in the long run.
Charge card users may see more
damage done to a credit score and higher penalties for missing a payment, than if he or she had applied for a credit card instead.
It's hard enough to face the financial consequences of student loan default — but the damage it can
do to your credit score can be just as far - reaching (more on that below).
But a lot of people worry about what rate shopping will
do to their credit score.
Too often, people are afraid to do what it takes to get out of debt because they're afraid of what it's going to
do to their credit scores.
Both are notorious for the damage they could
do to your credit score and so consumers avoid them when they really have no other choice.
Lenders often have a credit score estimator system in which they can accurately guess what different steps will
do to your credit score.
There are very few advantages of re-aging debt as more than likely the damage has already been
done to your credit score.
When the credit card chaos erupted in the last few years and people finally began to realize the damage they were
doing to their credit scores by overextending their credit, many made the mistake of shutting down credit card accounts completely.
Put simply, a debt that's older than two years has done almost all the damage it's going to
do to your credit score.
In general, the longer your payment is delayed, the more damage is
done to your credit score.
But the good news is that the older a collection account, the less negative damage
it does to credit scores.
Not only will it help you stop paying expensive late fees, but it will also help you start fixing the damage you've
done to your credit score.
Bankruptcy is the single worst thing you can
do to your credit score.
This informative tool will simulate what certain financial transactions will
do to your credit score.
Despite the fact that the steps vary based on the damage you have
done to your credit score, the most effective ones include the following;
The damage has already been
done to their credit score, paying it off will improve their credit score.
Contrary to popular belief however, most of the damage
done to your credit score will take place before you make a decision to file bankruptcy.
The longer a bill goes unpaid, the more damage
it does to your credit score.
But a lot of people worry about what rate shopping will
do to their credit score.
But a word of caution: Be wary of what churning can
do to your credit score.
By combining hard inquiries, you're better able to reduce the damage
done to your credit score.
This helps to mitigate any damage
done to your credit score and take some stress out of applying for new Amex cards.
Being hounded by a collector isn't the big thing to worry about — the longer an account stays in collections, the more damage
it does to your credit score.