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We are investors and we have a business. We use credit cards for all of our purchases. Help. We have good pay, good credit, but our credit is being dinged because of too many cards and too high balances. We have credit limits of 20 to $40,000. How can I solve this problem. The credit reports shows too many, and too high....etc.
It may have something to do with how much you owe on the credit cards. I would suggest using cash more often over using your credit cards. The number of cards usually do not have much effect on your credit as do the balances. Try getting some of these balances paid down and keep them from getting close to the limit. If you have tons of cards try paying off and closing the ones that really are not very important and have not been opened for a long time. Close newer cards as opposed to the older ones since the older cards shows a longer credit history and actually help your score.
credit
Yep............as you get the balances lowered, your credit score will start going up. If you get 'new' credit alot, then your score can lower again.
Do not close any account. This will only lower your score. Is your business incorporated or is it a SP? If your business is a SP, one thing you can do is make payments to your cards before they are due. The balance that is on your monthly statement is what gets reported to the CRA.
Hi Technical books
Creditors will not be willing to provide you with further lines of credit because you have already high credit limit in your card and the creditors will find it risky to issue you new lines of credit thinking that if you might default after taking the new credit. More and more credit reflects the fact that you are credit hungry which also has negative impact on your credit score. However, at this point of time you should not close any credit cards because by doing so you will lose the credit history on these cards and since credit history contributes 35% in your credit score, your credit score may fall.
If though there are alot of cards open and this does make the person look credit hungry could it benefit the person to close maybe a couple of the newer cards? I see you also recommended paying the debts earlier than their due date. There was alot of contrversy going on about this very thing and the government was suppose to step in and put a 30 time frame beofre a creditor can add fees on. I am not sure when it will pass but that should help.
If you close down your newer credit cards, it will not affect your credit score much because these new cards do not have a credit history which contributes about 35% in your FICO score. Moreover, length of the credit history which contributes about 15% in your FICO score is also not present in your new credit cards. So, it is always beneficial if you can close your new cards instead of closing the older cards.
Hi Fireyone
If you pay off the amount you spend on the credit cards even before the due date, it would not give any negative impact on your credit report. However, you should pay the outstanding amount after the statement date. If you can continue this every month, it will give a very good impact on the credit history and helps you to improve your credit score. However, if you are not able to make the full payment within the due date, make the minimum payment so that it is not listed in the credit report as negative.