Will a decrease in your line of credit affect your credit score? How about closing inactive credit c

I just recently received a letter from American Express saying that they lowered my line of credit from $2000 to $1400. One of the possible reasons they did so, was because I had a lot more debt in other cards. However, I just paid the almost $2000 balance I had with them off, along with the several (roughly 5) other credit cards I had. Now, would it be a good idea to close some of those accounts I had that I am no longer using? Or I also heard that to keep them open, and without using them for a long period of time they will eventually close themselves out with the creditor. Just a little extra info... I currently have 2 students loans that I am starting to pay off (a little less than $17,000) in order to decrease my debt. I also have a remaining balance of $9,900 on my car loan that I am still paying. I have never been late on any payments, and I have a credit score of 670. Any advice would help.. Thanks.

Will a decrease in your line of credit affect your credit score? How about closing inactive credit cards?

No, a full 30% of your score is based on your debt to credit ratio if you close any open credit card accounts you will lose the credit line for that card and if you carry balances this will increase your debt to credit ratio and if it goes over 30% your score will suffer.

Simply use your cards for every day things, never exceed 30% of your limit in any given month and pay them off in full before the due date and your score will continue to climb.

Additional information.

Scores are based on the following factors period.

1. Payment history 35%

2. Time in bureau 15%

3. Types of credit 10%

4. New credit 10%

5. Debt to credit ratio 30%

Notice there is no mention of debt to income because it doe%26#039;s not factor into your score period. Neither does the amount of available credit you have, the only thing that matters is your debt to credit ratio so the higher your credit limits and the lower your balances the better off you are.

Anyone who says different simply doe%26#039;s not know what they are talking about.

Will a decrease in your line of credit affect your credit score? How about closing inactive credit cards?

Assuming you are still young a 670 score is quite good! Keep the cards open, charge something on each every once in a while to keep the accounts active. If you close them your credit score will go down! Don%26#039;t worry about the reduction in credit line, banks are scared right now.

Will a decrease in your line of credit affect your credit score? How about closing inactive credit cards?

Do not close them all it will lower your credit score. I would personally keep three of them, two at the very least, you do not need 5 credit cards. Use them once in a while, for gas or whatever and pay them off in full each month. If you have the ability to be responsible with credit by keeping these cards open and never utilizing them above 30% of total available credit you score will only get higher. Just remember to make timely payment especially on those student loans. It looks as though you are well on your way to getting a very high credit score. Good Luck

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Will a decrease in your line of credit affect your credit score? How about closing inactive credit cards?

Absolutely yes.

Will a decrease in your line of credit affect your credit score? How about closing inactive credit cards?

Yes,unfortunately,it does affect your credit score.

I heard that too.If you have some credit cards that you don%26#039;t use it%26#039;s better to close them.In time,they%26#039;ll automatically close if you don%26#039;t use them.Also,if you have too many credit cards,it doesn%26#039;t matter if you use them or not,it affects your credit score.it%26#039;s considered debt.

Will a decrease in your line of credit affect your credit score? How about closing inactive credit cards?

Okay. Your credit score is based on the total amount of debt you could possibly have.

So in general its a good thing to reduce your CC limit and therefor improve your D/E (debt to equity) ratio.

In general the bank wants to see a D/E of about 0.39 as calculated by your total monthly credit payments divided by your GROSS income. For a real budget, obviously you need to work only with your NET income.

1. Keep only ONE credit card and %26quot;use it for emergencies%26quot; only.

2. Keep only ONE Debit Card

3. distroy all other CC%26#039;s including Dept.store, Gas, Consumer credit (furniture, etc).

If you have a student loan. You can deduct that from your taxble income....If the interest rate is high and you have a mortgage, you can take a Equity line of credit to pay that off, but I wouldnt recommend it unless your student loan has an extremely high rate. (%26gt;10%)

Eliminating the extra CC%26#039;s, and not using the one (or payoff at the end of the month) will greatly improve your score.

The only other way to improve your score is to get a better job . Thats the other side of the equation.....ability to pay means ability to make more.

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