Saturday, March 21, 2009

Help! My policy's with AIG

By: Li Bin Chen

NEW YORK ( -- Question 1. If you have no credit card debt and have closed your credit card accounts, how can this hurt your credit score? - Nathan

First, how long you've used your cards accounts for about 15% of your FICO score. The longer history you have managing a card, the better your score will be.

Secondly, your FICO score also calculates how much credit you have in relation to your debt. By closing a card, you wipe away some of that available credit and that makes your debt look bigger - if you do carry debt at some point.

Some issuers are even closing down your credit cards if you don't use them often enough. So be sure to spread around your purchases on different cards so you avoid this situation.

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