Tuesday, August 19, 2008

Why Credit Card Debt Affect Credit Score?

If you are looking for information on the credit report repair or debt relief, you have probably heard that credit card debt a negative impact on your credit evaluation. Almost everything that has problems with their credit has been advised to pay down credit cards and reduce them. This is not bad advice, but usually with this recommendation, he also announced the closure of paid accounts. This may be a bad idea.

Closing an account can have a negative impact on your credit evaluation. If you are thinking about closing accounts that are paid in arrears, it will be to your benefit to contact a credit counselor. Education, an experienced consultant can look at your specific situation and help you to make favorable decisions.

What is considered in calculating the credit score?

There are five main categories, which are mainly calculated on your rating. They include:

1. Your payment history
2. Your new loan
3. Types of credit that you have
4. The length of your credit history
5. The amount of debt you

Credit card debt can lower your rating, however, set up accounts that you used responsibly could actually increase it. Poor payment history will remain on its report for some time anyway, whether or not the account is closed. Thus, you are likely to fall into the situation, if you close the account, not knowing exactly what their closing will actually benefit you.

In some cases, closing accounts will be profitable, but in many situations it would be disturbing consequences. He will be in your interests to consult with a professional consultant credit prior to the adoption Do-It-measures against credit report repair.

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