Pay down or cance?????????????????????

[Anonymous]

Under the heading of "whats hurting my fico score" is that I have too many credit accoutns that carry a balance.  It is suggested that I reduce the number of accounts that carry a balance.  Now my question is should I pay off and close some accounts or just pay them off and leave them open?  Which would be more beneficial? Any advice is appreciated....

[llecs]

Welcome to the forums!

Pay them off and do not cancel. That reg flag you see in the FICO report will disappear once it sees the right number of accounts at $0 in relation to your total number of accounts (approx. half I think).

You would want to keep them open. Closing them won't hurt your history now, but in the long run, 10 yrs out if they stay in good standing, your score will take a hit as these (hypothetically closed) accounts fall of your CR. The only time you should consider closing an account is if there are fees or charges that make the account expensive to maintain all the while having a $0 balance.

[Anonymous]

thanks so much for answering that so quickly..ok..let me ask you one more thing.  would it be "better" to get a loan (assuming its at a rate lower than the cc) and pay off my cc and another loan (in good standing) or just leave as is and just pay off without getting a loan to pay off those cc???  make sense?

[llecs]

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kymou812 wrote:
thanks so much for answering that so quickly..ok..let me ask you one more thing.  would it be "better" to get a loan (assuming its at a rate lower than the cc) and pay off my cc and another loan (in good standing) or just leave as is and just pay off without getting a loan to pay off those cc???  make sense?

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It my opinion to avoid loans if at all possible. There's nothing wrong with them, but if there's a chance you can pay down your debt without getting into more debt via a consolidation loan or whatever, then I'd go the paydown route. Your credit won't get dinged with the new loan account, your avg. age won't take a hit, and you may even save an inquiry. My opinion might be different if the rates on the debt I currently had was super-high, and I couldn't pay in full, I guess.