You didn't need to close the card. All you you needed to do was stop making new charges. That way, as you paid down your debt, your credit score would steadily improve. A good chunk of your credit score is your debt to credit ratio. If you eliminate debt will keeping the same credit limits, your score goes up. If you eliminate available credit, your score may actually go down even though you are paying off debt. Since you have a house and car already, that may issue for you, but it certainly can be for others.

However, that advice clearly would not have worked in jannie's case, as she doesn't have the discipline to NOT use her credit to the max.

Evidence: "Every time I got near my credit limit, the credit card company would raise the limit or send me blank "cash advance" checks. Bad for me."

Having all that available credit was too much temptation for her....

We don't understand this. We have multiple credit cards but only use one, which we pay off monthly. We never carry a balance. We have no other debt. The other credit cards, which appear are not used and haven't been for many years. Most are store cards we didn't close because we thought that would hurt our credit score. We have a few Visa and Mastercards which haven't been used in years.

We only use one card. So, how do we lower this ratio without formally closing out the cards?

Jane

They may be talking about the ratio of debt to available credit. Remember that debt also include things like mortgages and car loans. So you could be paying off your credit card each month but still have a large mortgage payment. The answer then may be to increase your available credit.

They are also concerned about available credit relative to your income. Let's say you earn $20,000 per year but have $40,000 of available credit. If something happened, like losing you job, that available credit could be quickly eaten up without a means to repay it. Then it may make sense to close an older, unused, card.

Well, they always comment on something. They are trying to sell you services, so they want to tell you what you can improve. Also, depending on when you pulled it, you might have had a balance on the card you use. That counts against you even if you always pay it off on time.

If you are actually concerned, the most common cause of this on a good credit score is that they picked up the balance but not the credit limit of one or more card. If you pull the detail, you can check to make sure everything is accurate and challenge anything that is not. All 3 agencies are HORRIBLE at keeping accurate records. The error rate is absurdly high.

"Hey, guys, thanks for dumping on me and telling me everything I did "wrong"."

Nobody dumped on you or called you a horrible person. We just pointed out how you could make your situation better. Most people appreciate not having to learn everything the hard way, but of course, you are always free to ignore any and all advice if you choose.

This really bugs me. What you did was not honest or honorable, and I think it was very low.

Sorry, you post your problems in a public forum, you should be prepared for what you get in return.

No, it doesn't on any planet.

It means that you don't have the discipline to keep open credit lines...
and you recognized that you do NOT, and you closed the cards.

I don't see that an unfriendly, just real.

Did your plan work? Apparently not. Ditch the credit cards and only use cash. Prove to yourself that you can live on a budget within your means. You'll feel better about yourself and come out better in the long run.

For those that are paying off cards every month you should be aware that your balance is checked on any day not on the day after you make your payment. If you are unlucky your balance could be checked on the day of your highest balance or your lowest. They credit rating companies do not care if you pay the balance off every month just what it was on any given day.

My credit/debit is probably due to too much available credit which is sitting on the unused cards. There are 4 Visa/Master cards with a combined available credit available over $100K. These were old cards which are still open but not used.

We are retired and our income is lower than it was back then, so I suppose it worries them. The only option would be to close all these cards including all the store cards. I'm afraid it could hurt our credit score. Our score was 740 but the statement said it could be higher except for the credit/debt ratio. We were always told to not close cards. So what does one do?

Jane (who is NOT 'Jannie')

If FICO scores only impacted your ability to borrow more money, then you would be doing the right thing. However, they have become much more important that that. Just about every insurance company uses them to set premiums. Lots and lots of employers use them as screening tools. Unnecessarily lowering your FICO scores is just a bad idea.

And, if you are still following, you should contact the NFCC for no or low cost credit counseling in your area. If you have $3,000 per month to pay down $35,000 in debt, they will be able to show you how to do it way less time then you are talking about. Even at 20% interest you should have this paid off in 14 months.

Anyone looking for some ra-ra pay down your debts cheerleading should check out Dave Ramsey. That is his schtick and he is pretty good at it.

Billl's recent post is good advice. Although a recent court ruling has dampened employers' enthusiasm for checking the credit scores on new employees, it is still being done and you never really know what might happen in your life to upset your plans. Almost all insurers, for example, now check the credit score on new applicants.

I hope that jane_ny saw the thread I posted on credit scores and clicked on the link to read the full article. It's an excellent primer for understanding what affects your credit score both positively and negatively.

Sometimes the only way to handle one's finances successfully is to 'trick' oneself. We have a hard time saving money, for example, so years ago I finally set it up to be automatically deducted and sent to two different accounts, one of which is on-line so it takes a few days to transfer funds. It's interesting how even that slight delay would make me think and hesitate.

If we made financial education mandatory, a good part of the curriculum would involve learning how to use credit wisely, to begin with.

Your right Jannie, some folks are known around here for dumping on others and then pretending they don't know how they sound.....

I applaud your efforts to rein in your debt. At least you own your house and aren't relying on a clunker to get to your job.

Best wishes going forward in managing your money.

It sounds like you are making changes. Having your home paid off is excellent. If you can cut your spending in half, you will get out of debt quickly. There are many blogs on simple living that are helpful.

I thought that you meant that you weren't going to pay the lawyer, too. For some people, credit cards are like alcohol. When I had cc debt, it seemed like everything I had kept breaking: my car, my appliances, etc...Now I see how stressed I was by spending more than I was making. (My home was paid off, when I was in debt,too.) Once I started tracking my expenses and writing down concrete financial goals, I was able to turn it all around. Money is very emotional and psychological. Reading books about how people survived the Great Depression helped me, too. Good luck!