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In these tough economic times, it's wise to know just how much you owe people out there. By people, I mean creditors. I admit, I was one who would open a credit card at a store to save the extra 10% on my purchases that day. But then I would never use the card again. BUT, I also never canceled the card. Not a good idea. Luckily I carried zero balances on almost all of those cards, but to those who you may be asking to give you a loan, it don't look good.
So my husband ran credit reports for us both. Not on F-R-E-E, that spells free, credit report.com, baby but on A-N-N-U-A-L credit report.com, tootse. Go here if you want one. Apparently Free Credit Report.com, while darn catchy and fun, charges your credit card for using them. WTF!? Annual Credit Report does nothing of the sort for your basic credit report. Like, where do you have cards to, when did you open it, what's your balance, what's the amount of your last payment, and the date the card was last used.
I guess somewhere along the line I had opened about 17 credit cards. Yowza! Some of those were for furniture that I bought and had financed or for my car or for my freakin basement waterproofing, things of that nature. So they weren't ALL The Limited-type cards. But a decent amount of them were. We are considering refinancing our house and in order to show them that I'm not going on some crazy shopping spree at Lerner (which isn't even called that anymore!), I canceled them. And even if we weren't thinking about refinancing, they needed to be closed. I never used them. Now I only have one general credit card - it's recommended that you keep open the card you have had the longest to show that you have established credit.
I think it took all of a half an hour to close them. It was so easy! Once you finally get to talk to someone and they try to throw coupons and discounts at you to try and keep you and you politely decline (although you desperately would love to have 30% off a new outfit) , it takes them all of 25 seconds to close your account. But then it takes 30 days for notice of the closing to be sent to creditors and show up on your report. It was time well spent.
This is just my public service announcement to all of you who may be in the same situation. It's something to think about doing and really it takes little to no effort at all.
10 comments:
Very good!!
When we purchased our house they recommended that we close all those little department store cards as well. Something about potential debt to income ratio. However, i find it humerous (actually NOT humerous at all) that they said it actually HELPED my credit score by having all these cards opened with no balance or very little balance because it showed I could be responsible with money (ha, sucker) and therefore the good credit score would allow us to buy a home BUT that it HURTS you when it comes time to make big purchases...like a house. Say what?!?!
Yeah, basically according to her, you need the cards to buy the house but can't have the cards to buy the house.
Anyways, I did the same as you and closed all my lame department store ones, I would say I was right around your number of open cards! it is crazy, I forgot I even had some of them.
Good for you!
Now, I've heard that you should not, actually close all of your not-currently-in-use credit cards. Is that not true?
As a side note, I find Suze Orman terrifying. She raises my blood pressure when I hear her speak. I find her to be wise, yet too much. If she'd just keep her trap shut and type her show, I'd watch it.
I guess it all depends. I still have a couple, because of furniture and whatnot, but I simply did not need a Limited card, Express card, Lerner card, Old Navy card and department stores that we don't even have here. They seemed more detrimental than anything, especially for refinancing purposes.
You are supposed to keep open the card you have had the longest.
And there is no reason you can't open a card again later. When I closed them, they all mentioned that.
Seems to be a slippery slope but I did not need 17 cards, I know that fo sho.
17. Hee hee.
Lerner used to be da bomb.
WK and TP are both sort of right. You do need a card(s) to show that you have good credit and are responsible with said credit. The number of cards one should have, at least I have been told by banking people, is 2 or 3 total. But if your name is on a mortgage, that would count too. Or a student loan(s), same thing. To have nothing on credit report is detrimental. To have much more than 3 or 4 (barring astronomical wealth on your behalf) probably makes it worse.
Part of one of the credit reporting services is your debt to credit ratio. If you have oh, say, 17 cards, and each has a max of $1,000 ($17,000 credit) and you carry say $1,000 total (your debt), you have a VERY low debt to credit ratio. That's a good thing, as WK alluded to. If you have that same credit but carry $16,000 in debt. That, clearly, is bad.
Good for you! Awesome! Make sure Free Credit Report.com doesn't charge you in a few months though. They did to me - it was something like a $17.99 charge a month to have an account.
Took,
We used annualcreditreport.com for that very reason. ACR is the Federal Trade Commission website setup and maintained by the government that is truly free to users (no credit card required to get your reports), while freecreditreport.com is a private group that sneaks in the charges after allowing YOU access to YOUR credit information.
I wish I would have been as smart as you guys :)
I just want to say that, when the Lerner next to Lion store at Westgate went out of business, they had a massive clearance sale on all of their knit separates. You could buy t-shirts and matching elastic-waist skirts to create stunning monochromatic ensembles. And you'd better believe my mom and I went over there and bought out the place.
That is all.
Why THANK you! I've been looking for a F.R.E.E. one!
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