4 MYTHS ON FICO SCORES REVEALED PART 1

HOMES

The American economy continues to be not stable as banks continue to foreclose on homes, people lose their jobs and uncertainty in the Middle East. People do not know who to believe. The days of using ones house as an ATM machine has vanished. Today, people are going back to basics by tracking their money and paying down debt? Personally, I think that is awesome. We need to get back to basics as our grandparents did in their time.

I would like to discuss 4 Myths on FICO Scores over a four part series. I am sure many people are making decisions without knowing the proper information before it hits their credit report.

Myth 1: CLOSING ACCOUNTS WILL IMPROVE MY CREDIT SCORE.

stop

I host a weekly radio show here in Phoenix, Arizona, on Saturdays from 12-2PM on KKNT 960 AM. I have live call-ins per week. Many people inform me that their own bank told them to close their credit carcs because too many open accounts can hurt one's credit score. That is true and not true.

The FICO magic score system looks at available on each card and what one is using. Shutting down accounts will shrink the availability in which will make your balances increase and will typically hurt your score.

Shutting down old accounts in good standing will also hurt your score. Mortgage companies want three postiive trade lines that have been open for one year or more. Shutting down old accounts will make the other accounts look new and hinders ones credit score.

BOTTOM LINE: PAYOFF OFF YOUR CREDIT CARD DEBT AND LEAVE THE CARDS OPEN. THIS WILL DEFINITELY INCREASE ONE'S CREDIT SCORE.

Please feel free to visit www.960RealEstate.com for further information on investing in real estate. The Real Estate and Beyond Team is here to serve the needs of the public.

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Feel free to listen to my Radio Show to learn more about the phoenix real estate market, new trends, and the latest opportunities.  The Real Estate and Beyond Radio Show Airs every Saturday from Noon-2:00pm on Conservative Newstalk KKNT 960am in Phoenix, Arizona.  You can listent to past shows, or stream on-line.

 

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Comment balloon 7 commentsHarry F. D'Elia • October 27 2009 04:25PM

Comments

Harry, I remember a bunch of years ago, I closed down a Visa account with a huge credit limit.  I had other accounts with huge limits and didn't want the temptation.  I should have just put the card in a safe place and forgotten about it!  I shoulda known better.

Posted by Patricia Kennedy, Home in the Capital (RLAH Real Estate) almost 9 years ago

GOOD MORNING HARRY!  I always get confused looks when people say, "I've closed all my credit card accounts." and a lender or myself will say, "let's open one up!"  Good explanation here for them! -- Gabrielle

Posted by Gabrielle Kamahele Rhind, Broker/Owner (KGC Properties LLC, Tucson Property Management & Real Estate) almost 9 years ago

Patricia we are here to educate the consumer on all fronts

Posted by Harry F. D'Elia, Investor , Mentor, GRI, Radio, CIPS, REOs, ABR (Real Estate and Beyond, LLC) almost 9 years ago

Gab-people need three solid lines of credit open for one year or more. I have people with the minimum FICO score but do not have the trade lines. Educate Educate Educate the public

Posted by Harry F. D'Elia, Investor , Mentor, GRI, Radio, CIPS, REOs, ABR (Real Estate and Beyond, LLC) almost 9 years ago

Thanks for another informative post today. Have a great day.

Posted by Eric Villaverde (DoubleTree Home Inspection Services L.L.C.) almost 9 years ago

I continue to learn something new on each of your posts. Keep up the great contribution to AR

Posted by Katiejo Franks (Real Estate and Beyond, LLC) almost 9 years ago

Thanks for the rain today

Posted by Harry F. D'Elia, Investor , Mentor, GRI, Radio, CIPS, REOs, ABR (Real Estate and Beyond, LLC) almost 9 years ago

Participate