Bad Credit Repair And Credit Card Use–Consumers Cautioned Against Closing A Credit Card Account

Bad credit repair and responsible credit card use go hand-in-hand as individuals who may have had trouble controlling their debts or who have seen financial troubles arise that may have done damage to their credit score must simply put in the work of building a more positive credit history through smart credit card spending and repayment habits before they will see an increase in their credit score. However, consumers who may have multiple credit card debts often make the mistake of closing a credit card account after they have paid off the debt associated with this card, as obviously erasing debts is the first step to bad credit repair.

Yet, the process of repairing one’s bad credit score will take time and consists of many factors, as does a consumer’s credit score, but when it comes to credit card use, consumers are being cautioned about how they spend, repay, and continue to use cards they feel may no longer be helpful for their bad credit repair situation. Counselors often advise against closing a credit card account simply because this will lower the amount of credit a consumer has available, and when this is factored in to their overall credit history and score, consumers that have a lower credit utilization ratio, meaning lower access to credit when compared to the possibility of a higher amount of debt, may see a lower score as a result.

Obviously, the higher amount of total credit available to a consumer versus the lower the debt in their life, will typically lead to a more positive credit score due to the fact that they have access to a large amount of credit but are keeping their debts in check, through either smart financial practices or by simply using their credit cards sparingly. Yet, when a consumer has paid off a card during the process of bad credit repair, many often close their credit card account, continue to combat other debts, and then begin repairing their bad credit score with the use of only one or two cards.

Yet, many advisers, often suggest that consumers simply keep these lines of credit open as, again, when debts are erased the amount of credit available to the consumer will obviously be much higher compared to their debt if they had kept their accounts active. An article on Smartcredit.com reiterates this point and states that when it comes to multiple credit cards, “…use them at least once a quarter to keep the account active. Make sure you pay them in full when the bill arrives.” Essentially, consumers can use these cards to help them in their bad credit repair process, as charging on credit and making timely payments will reflect well on one’s credit history and help improve their score over time.

While, again, bad credit repair does take time, proper budgeting, and correct spending and repayment habits, consumers who may have multiple credit cards might find that they have taken a step back in the credit repair process if they begin closing their credit card accounts after they have paid off these debts. Having a high credit utilization ratio is not the only aspect of bad credit repair, but it is just one of the building blocks that consumers must take care of when they are attempting to improve their credit history and increase a poor credit score.