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<< So Where Do Creditors Make All Their Billions? | Applying For New Credit Cards? A Few Vital Pieces of Information You Need To Know and Consider. >>

How to Close a Credit Card with Minimal Damage to Your Credit Score

Author: Rami.A

2 Feb 2010

If you haven’t read my article on how closing a credit card may damage your credit, please make sure to read the article here.

Know your credit score

The first step to not hurting your credit score is knowing what it is. You can get a free copy annually at www.annualcreditreport.com

Zero-out your balances

It’s better to pay off your card before telling your creditors of your plan to close the account. Lenders could raise the interest rate on your balance, forcing you to pay back more in interest simply because you’ve closed the card.

Close the account

Write down the date, time, and names of the people you spoke to. That way, if there’s something that was done incorrectly, you have the facts recorded. Having the time and name of the individual is good information, particularly if the company you’re dealing with records calls. This makes it much easier to find the call in their logs if it is needed to settle a dispute.

Keep in mind your utilization ratio – how much credit you’ve used versus how much you have available – as well as how long you’ve had the card you intend to close out. Both factors are considered in your credit score, and closing a card prematurely can have a negative effect on your score.

Get written confirmation

Always ask for written confirmation that the account has been closed. This way you know that the representative you spoke to did, in fact, take care of your request and it was reported correctly to the credit bureau. Also, make sure you follow up. If you didn’t receive the letter, call and ask about it. You can check your credit report as well.

Sit back… diligently

A card closing could take up to a month. Your job is to receive the confirmation letter. If you haven’t received the letter within a month, follow up. I can’t stress enough how important it is for you to be diligent with creditors who are supposed to be performing services for you. We’d all love for this to be a perfect world with no screw-ups but even the people working for creditors make mistakes. It is your responsibility to make sure that the account closure was reported to the credit bureaus correctly. It is your responsibility to follow up with written communications. Don’t just take for granted that the representative will do what they said they would. It’s your credit, protect it.

If you have credit card debt, medical bills or collection accounts, the National Debt Relief Group can help with a free consultation. You can fill out our Short Application and one of our debt specialists will contact you within minutes, or you can call now – (888) 703-4948.

www.nationalrelief.com

Tags: closing credit cards, debt relief, debt relief program, ruining your credit, credit damage, credit repair, credit score, debt management

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