Most people think it is a good thing to have tons of loan accounts. In fact, some may have so many credit accounts that they forget about them after opening them.
You personally, probably have at least 5-8 credit cards, 5 store cards, 2-3 credit lines and much more. A lot of the money that you own via dozens of accounts stays unused and that actually reduces your credit score.
Yes, unused loans that are doing nothing but are under your name hurt your credit score. Most people don’t realize this but question why their ratings are low. Some people might be reluctant to reduce their unused loans but the fact is, it will improve your score. By improving your credit score, anytime you need a loan, the banks or loan offices won’t mind giving you a loan because of your good score.
So it’s a win win situation.
Here is how you will improve your score by 80 points…
Get a free credit report in 5 minutes
1. Search for “free credit reports online” in Google.
2. Go through the results and pick out the ones that offer reporting services.
3. Request for a personal report for the past 2 years.
Improve your credit score
1. Once you have your report, find loans that are unused by large amounts
2. Call the company and ask to reduce loan to the minimum point (don’t close the account because that hurts your score)
3. Ask the representative to put in a request to do an interest appraisal (once the appraisal comes, this is the sign that your credit score has improved).
You might have many unused loan amounts and by reducing them all you will see your credit score improve anywhere from 80-120 points. That is a huge improvement in the world of finance. Then you will able to save money in interest and also apply for loans whenever you or your family needs it.