Closing Credit Cards

Innovative Credit Consultants team busts one of the biggest myths in credit repair. Consumers need the right answer to
"Will closing your credit cards increase your credit rating?"

The answer is no. In fact, it will have an extremely negative impact
on your score.

Why?

There are several equations used to determine your credit worthiness.
One of the equations factored by scoring models is called "revolving
utilization". Revolving utilization is the available percentage of the
credit card you are utilizing as balances. What does that mean?

(Point to diagram) If you have four credit cards with an available
credit balance of $5,000 then your cumulative balance is $20,000
making your utilization 0%. If you max out two out of four of those
cards you will have a cumulative balance of $10,000. This brings your
utilization down to 50%.

So let's say that you decide to rid your life of the two unused credit
cards (cross out two remaining credit cards on board). Your aggregate
balance falls to zero and your utilization rate shoots to 100%. What
does that mean? Your credit rating just fell significantly.

*We are putting together a video right now so that you have a visual example of the utilization formula. Check back with us next week!*