Crash Credit Course for "Dummies" Needed

[Anonymous]

I recently paid off my balances on two credit cards $1300 on one and $1400on the other).  Before I paid them off, my Fico score went down because they were maxed, so you can imagine my confusion when my credit score went down again (by 21 points), right after I paid off the two balances.  Why did it go down? OK, second question:  On one of the cards I paid off the balance, the interest rate is 23.15%.  That's way to high.  I want to close the account (I've had excellant pay history with them, never, ever late and always paid 50 to a 100 dollars over the monthly fee).  Will I lose more Fico points if I close the account?  If so, how can I get them to lower my interest rate so I won't have to close the account?

[Anonymous]

I wouldn't close anything just yet.  How old are the cards?  The older the credit history the better it is for your scores.  Do they have high annual fees that you want to get rid of? 

The drop in your scores after the payoff may very well be a temporary anomaly.  Are you sure nothing else changed on your reports?  As you read up here you'll find much talk about "utililization" on your cc's.  It's best to keep it between 1 and 9 %.  I would think you will get a bump from getting rid of those high balances. 

Hope that helps a little

ctRob

[Anonymous]

As far as the interest rate, you should call and ask to have it reduced.  Tell them your "thinking about closing the card" (not a lie, right?)  Sometimes they'll budge.  What cc is it?

And by the way,  Welcome - tons of good info and expertise here!  Good Luck

Live Long & Prosper,

ctRob

[Tuscani]

Be sure to read the Scoring 101 thread as well.

[Anonymous]

One of the cards I've had for about 2 yrs, the other one is coming up on one year in September.

When I maxed out the cards a few months ago, my FICO score went down, I understood why.  Now, I pay them off and instead of going up, my FICO score went down.

I contacted the cc company with the high interest rate by email and they emailed me back stating at this time they cannot lower my rate.  I advised them I would close the account.  They emailed me that they would hate to lose me as a customer....etc.  Should I try to contact them by phone? 

Thanks ctRob for welcoming me to the site!: smileyhappy:

Thanks Tuscani and everyone else who passes on their "wisdom" of the "cards" to me.

[Anonymous]

I would definately try the phone, nothing to lose.  I don't know how much of an impact losing a two-year old card would be.  But it's still two years of history. 

Can't you just keep them and not use them?  Maybe pick up a better card elsewhere if you really need to carry a balance occaisonally?

[Anonymous]

They are charging me an annual fee.  That is why I wanted to close them rather than leave it open and not use it.

[Anonymous]

Have you tried seeing if you can convert to a no-annual-fee card? That way, you could keep the history but not have the fee.