Credit Score Lessons - Black Enterprise
  • Entrepreneurship
  • Money
  • Leadership
    • Career
    • Education
    • Jobs
    • Men
    • Women
  • Technology
  • Lifestyle
  • Events
    • Black Men Xcel
    • Entrepreneurs Summit
    • TechConneXt
    • Women of Power
    • American Black Film Festival
    • ABFF Honors
  • Lists
  • Magazine
  • Videos
  • TV Shows
    • Our World
    • Women of Power
25 black women who are changing the world

January/February 2018

Black Enterprise
  • Entrepreneurship
  • Money
  • Leadership
    • Career
    • Education
    • Jobs
    • Men
    • Women
  • Technology
  • Lifestyle
  • Events
    • Black Men Xcel
    • Entrepreneurs Summit
    • TechConneXt
    • Women of Power
    • American Black Film Festival
    • ABFF Honors
  • Lists
  • Magazine
  • Videos
  • TV Shows
    • Our World
    • Women of Power

Credit Score Lessons

by  Tanisha A. Sykes
May 1, 2005

Q: I have nine credit cards and have paid off four, but I read somewhere that you should not close the accounts because if you do, that could actually lower your credit score. I don’t understand how paying them off and closing them could negatively affect my credit score. It seems I am being penalized for doing so. Hope you can help.
—T. Jackson, Indianapolis

A: Yes, it’s true that closing your credit card accounts could and probably will lower your credit score because it shortens the length of time that you’ve held credit. Essentially, the longer you have a card (in good standing, of course), the higher your score.

But there are other factors such as having a high debt-to-income ratio, which can come from having too many credit cards with high balances. If, for example, your nine credit cards total $50,000 in available credit, yet your income is $40,000, it’s a red flag to creditors that you are carrying too much credit, which equates to the amount of debt that you could incur. I recommend lowering the balances, but keeping the cards.

For more information, order Everything You Wanted to Know About Credit But Were Too Ashamed to Ask Workbook: A Crash Course in Consumer Credit by Anthony Miles (Rising Star Foundation; $29.95) at www.black enterprise.com/books.

Join the Conversation


MORE ON BlackEnterprise.com
franchise
Entrepreneurship
More Black Americans Are Becoming Franchise Owners and Fueling Small Business Growth
by  Jeffrey McKinney
Education
Creating Opportunity, One Internship at a Time
by  Robin White Goode
Founder, Christian Annice (Image: eMillions+)
Money
Four Tips to Increase Your Credit Score From a Credit Expert
by  Sequoia Blodgett

TRENDING

  • Baltimore May Sell Homes for $1 to Revive Neglected…
  • Spotify is Looking for New Female Podcasters of Color
  • Meet Melissa Harville-Lebron: The First Black Woman to Own a
  • Free Money? The Top 10 Grants Available to Black, Minority…
  • 7 Top Grants Or Free Money For Black Women Entrepreneurs
  • U.S. Small Business Administration and Milken Institute…
  • 5 Books Every Millennial Entrepreneur Must Read
  • Top WNBA Salaries vs. NBA Salaries: Who Earns More? [2017…
  • Meet the Dallas Mavericks’ New CEO
  • Chance the Rapper Hosts Holiday Party to Help the Homeless
Women of Power WOMEN OF POWER SUMMIT
Entrepreneurs Summit ENTREPRENEURS SUMMIT
American Black File Festival AMERICAN BLACK FILM FESTIVAL
Our World OUR WORLD WITH BLACK ENTERPRISE
Women of Power TV WOMEN OF POWER TV
25 black women who are changing the world
SUBSCRIBE
GIVE A GIFT
CUSTOMER SERVICE
  • © 2018
  • BLACK ENTERPRISE
  • Management
  • About
  • Privacy Policy
  • Contact
  • Site Map
  • Masthead
  • Media Kit