Credit repair
Sometimes, individuals think that they can cleverly work around the system by closing out a credit card that has an existing balance. Credit companies are aware of this type of scheme, and they enforce simple measures to prevent it from happening. If you close out your credit card before paying off the balance, two things will happen:
Your credit limit will drop to $0
Your balance will remain the same
This means that your credit card will effectively be maxed out, since your remaining balance will be above zero by default. Subsequently, it will have the same effect on your credit score as a maxed out credit card.
How to avoid: Be sure to pay off your entire balance before closing out the card. If you feel like the payments have become too delinquent to conceivably pay off, closing the account is not the answer. The debt will remain, and you’ll be forced to pay it off eventually through a legal judgment or a debt collector.
For more tips on how to help increase or maintain your credit score, call Vitesse Financial toll free at 866.407.9110. Vitesse Financial has over 15 years of spot-free experience and will handle your case with compassion and care.
