Keep the cards

Personal Finance: What seems like a sound move may end up hurting your credit rating | David L. Bahnsen

Dear Editor:

We heard a news report about having many open credit cards to improve one's credit score. Is this true? We have paid all our debt off except for our house and truck and closed the accounts. Will this hurt our credit score? How can we improve our score?

We are one of many who have an adjustable rate mortgage (ARM) on our home and want to get out of it. What is the best way to do this?

Thank you,
Jon and Ruth Carley

Dear Mr. and Mrs. Carley:

You have addressed a number of different subjects in your inquiry, and I will attempt to answer them one at a time. These are important topics, indeed.

It is not so much true that "having open credit cards" helps your credit score as it is true that closing accounts that had a good payment history hurts your credit score. If you have a good payment history on a credit card account, pay your balance down to $0 and leave it open, there is nothing that will hurt your credit by leaving the account open.