Credit Cards

Should I take advantage of promotional credit card offers?

Generally, opening new accounts can indicate increased credit risk and can hurt your FICO® Scores. Every individual’s situation is unique, but in general consumers with a moderate number of revolving accounts on their credit reports generally represent lower risk than consumers with either a relatively large number or a very limited number of revolving accounts. However, please keep in mind that opening a new account, and to a lesser extent the resulting credit inquiry, may demonstrate higher risk in the short term.

Will closing a credit card account affect a FICO® Score?

Yes, but not in the way you might expect. And, while closing an account may be a good strategy for responsible financial health management in some cases, it also may have a negative effect on your FICO® Scores.

FICO® Scores take into consideration something called a “credit utilization ratio”. This ratio looks at your total used credit in relation to your total available credit; the higher this ratio is, the more it can negatively affect your FICO® Scores. Closing an old or unused card essentially wipes away some of your available credit and thereby increases your credit utilization ratio.

What’s the best way to manage my growing credit card debt?

There are several things to consider when managing credit card debt. People who only have one credit card available and are coming close to maxing out that card, might consider applying for another card, since credit utilization affects their FICO® Scores.

However, it is also important to keep in mind that consumers with a moderate number of revolving accounts on their credit report generally represent lower risk than consumers with either a relatively large number, or a very limited number of revolving accounts.

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Redwood Credit Union and Fair Isaac are not credit repair organizations as defined under federal or state law, including the Credit Repair Organizations Act. Redwood Credit Union and Fair Isaac do not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating.

FICO® Score and associated educational content are provided solely for your own non-commercial personal review, use and benefit.