So I'm a long time lurker and have been on and off the site for a while. I have had many questions answered already but I still a novice at this credit thing. I'll give my background first and I have some questions that I haven't found the answers to while browsing this site. If you don’t feel like reading my story or you find it boring feel free to just skip down to my questions. Any replies and or insight is helpful!
I got my first credit card my senior year in high school (2002) with a $200 limit. It was awesome because I was the only student in school that had one. Fast forward several years I had opened and closed a total of 14 revolving accounts, 2 car loans and a mortgage on my record. Being young and stupid and not knowing the damage I was causing me was reckleously opening accounts left and right. To this day it amazes me how easy it was to buy a 380K house with no money down and an extreme amount of debt already racked up. I had no idea of the costs of owning a house and didn't even know what I was signing up for. At my peck in 2008-2009 I owed approximately 30K in credit cards and another 10K in my auto loans along with a $2500 mortgage payment. We were making it due to my really good paying job but it wasn't comfortable. We decided to left the house go and my wife went back to school. Within a few months of stopping payments on the house I had all but one of my accounts stopped or closed. During the foreclosure process we applied every penny to paying off our debts and car notes instead of filing for bankruptcy. We paid off all 40K and was still was to save up some cash for my wife's tuition. I started to rebuild my credit slowly. My wife is going to graduate from nursing school next month and hopefully she will get a good job soon so we can start the process of buying a home within a few years but doing it the right way this time. I just want to make sure I have my credit fixed in time.
I started rebuilding in 2010 and currently I have 4 revolving accounts with only $260 in debt and 1 Auto installment that’s halfway paid off. I just checked my credit report and score for the first time in a few years and I was surprised to see my score at 720. Here are some of my concern and questions I have so I can raise my score some more.
- I have a total credit line of $7,905. I recently paid it down and currently only owe $260. For my credit scores to keep increasing every month do I need to have activity on the accounts (using less than 10% of the credit line of course) and pay them off every month OR can the balance just sit at $0 with no activity and my score will still go up?
- I have a $2000 Zale’s Jewelry credit line from 2005 that I'm pretty sure I closed many years ago but it still appears to be open on my recent credit report. I haven't touched the account and it has had a balance of $0 for years. Since it’s my longest active account and has had a balance of $0 would it be smart to keep it open even though I will never use it so that my debt to credit ratio stays lower and my total line of credit looks higher? Or would it just make sense to shut it down and bring my revolving accounts down to 3?
- On my credit report all 14 (except for 1) of my previously used revolving accounts show up as closed since 2009. How long do these closed accounts stay on your credit report? Do lenders see this many accounts open in the past as very big negative? NONE of them were ever late and all are paid off but it makes my credit report look messy and very long.
- If you ask for an increase in your credit line will they do a hard pull or will they just review your current account information any payment history?
- How long do credit inquries stay on your credit report and affect your credit score? I've seen 1 year and I've seen 2 years so clarification would be nice.
THANKS.
