Credit Rating - best way to improve it?

mountainofdebt

Hubby and I have, over the last year or so, missed a fair few payments on nearly all our credit cards although I would add (in any defence I may possibly put forward!) is that these have been made up.

However I know that missed payments are recorded on your credit history for a minimum of 36 months before they 'drop off' your record and that your credit rating can be affected by the amount of credit you already have.

So in order to improve our rating, is it better to close the credit card accounts as we clear them thus reducing the amount of credit available to us even though these closed accounts will permenantly say that we missed/were late with payments or is it better to leave them inactive for 3 years so that when we do close them, they look 'perfect'?

1jim

I would have thought it better to always maintain minimum payments on all of the cards where possible, (rather than missing peter to pay paul--- not that im saying you have done that)
then decide which of the cards you do not want anymore and cancel these (this may be influenced by credit limit etc).
from what i understand the card companies are usually looking to see how you conduct the accounts you have so am not sure if cancelling the cards will help, although i guess if a human looks at it they may think that theyve had problems paying the money back but have taken steps to address this in x amt months. will this help you get more credit in future? guess thats up to debate
all the best
jim

Fatboy_NSS

If you leave them inactive it will show as such on your credit file, so it wouldn't make any real difference. The most sensible thing to do would be to use at least one card for a purchase every month and pay it off in full. That would then show on your credit file as being paid on time every month, which is the best thing to have on your file.