credit score dip

[Edsdad2]

Rec'd notice from TransUnion that my score slipped from mid 7's to mid 6's in a very short time because of revolving credit too high, balance to limit revolving acct too high, Balance to limit on bank rev acct too high, too many recently opened rev. accts. The kicker is that the TU site says that paying off and closing all the acct at once could be deemed negative. HUH???

On the advice of a friend in the money business, I lowered the credit limit on all the cards to $500, replaced equity line with a fixed 15 year mortgage and made plan to close 1 credit card acct each month. Will keep my checking debit card and one bank credit card in the future. Does this seem like an effective plan?

[willingtocope]

Its certainly a wise plan. As a general rule, the fewer credit cards you have the better...the less debt you have the better. And, the only reason to even think about your FICO scores is if you plan to buy a house or car.

Any other use of FICO scoring is counter-intutive. Having "good" scores so you can get more credit cards so you can have more debt is NOT a wise choice.

[aadam101]

Your friend in the "money business" should probably find a new business. By lowering the credit limits you caused your utilization rate to rise. You friend screwed you over. You may want to call the credit card companies and see if they are willing to put them back where they were. You should never close an open account unless there is an annual fee.

[willingtocope]

Your friend in the "money business" should probably find a new business. By lowering the credit limits you caused your utilization rate to rise. You friend screwed you over. You may want to call the credit card companies and see if they are willing to put them back where they were. You should never close an open account unless there is an annual fee.

Sorry, I disagree. There is a very big difference between having good rip-off scores and making wise use of your money. I think the money business guy was right on. Close all but one CC...keep a relatively high limit in case of emergencies, but a very low utilization. And don't stress over what effect that has on your scores.

(I have 1 CC...a BK on my reports from 2-1/2 years ago....one car loan...NO other debt...and my scores average 690. Good enough to qualify for a mortgage.)

[Edsdad2]

Thanks for your replies. I thought the same thing as to not worrying about scores. I have more than enough equity in my house if we decide to relocate. It just got me P.O that these decisions the "big 3" make seem contradictory and they can affect uour life.