BILL'S ANSWER
Good question. The quick answer is: it depends. If you are carrying zero debt, and you have high limits. It does not hurt to carry a small balance (keep in mind, that may cost you in interest and financing charges, so weigh any credit rating benefits against the actual cash flow costs incurred).
If, however, you are carrying large balances (over 50% of your limits). You will want to pay them down asap to improve your credit.
For you, it is important to understand how your credit score is calculated. Your credit rating is calculated based on several variables, including: your payment history (do you have any late payments, charge-offs, etc.), the amount and type of debt that you owe, if you have maxed out any of your trade lines, and then several other secondary factors like the length of your credit history and how many recent inquiries have been made to look at your credit history.
Therefore, if any of these cards have a very long (several years) history of never missing a payment, then you may want to keep them open just to support a strong credit score. Derogatory items remain on your credit report for 7 years. A bankruptcy may remain on your credit report for up to 10 years.
These are a few of the considerations. If you would like more information, please visit our debt relief boot-camp.
We hope that this helped you to Find, Learn, and Save!
Best,
Bill
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