Thinking of closing your Credit Card because…is it gathering dust or is it not bringing you the rewards you expected early on? Well, it’s your money, after all — you can do with it what you like. But I also know that it is a tough decision, but if you are feeling indecisive, we are here to help you. There are times when Credit Cards will come back to haunt you in the long run. This can happen if you close your Credit Card too soon and find yourself in debt again.
How does closing a Credit Card affect your credit score?
Running a credit card can be fun, but not if it impacts your credit score. Credit cards have fantastic benefits, like shopping online and receiving discounts. However, when it comes to your credit score, running a balance can be dangerous and backfire on you in the long term. Before you close your credit card, it is essential to weigh your pros and cons and what impact it will have on your credit score.
What does your credit score comprise?
To start off, the age of your credit history accounts for 15% of your credit score. This means your average credit score could go up because of more extended account history. High scores translate into lower interest rates on credit since the lenders see a lengthier pattern of good credit history.
Why is the age of credit history important?
When you apply for a new credit card, loan, or any other credit line product, your credit history is the first thing any lender would account for. Long credit history usually suggests you are more experienced at managing your money and earning enough to repay your loan. Short credit history may indicate that you have less experience managing your finances and will have difficulty repaying the borrowed money on time.
What is the ideal length of credit history to positively impact credit score?
You may not pay attention to your credit report, but you should. In general, you need to have at least one account open that has been reporting to the credit bureaus for six months to have enough information to generate a credit score—and possibly a lower interest rate on another loan. When you get a Zolve Credit Card, your credit payment behavior is reported to major credit bureaus.
Zolve provides working professionals with a high-limit Credit Card and Bank Account with zero joining fees and annual charges. All you need to do is provide us with your basic information, passport, and visa, and you are all set for a valid US Credit Card and Bank Account even before you reach the land of your dreams!