Although it may sound odd and contradictory, too much credit can also be a bad thing. If you find yourself harboring many accounts, too many to use, look into closing them. The idea is that if you have too much credit available to you, it is more of a risk that you will utilize your access to this available credit on a detrimental spending spree. When you take action to close the account, the creditor has the responsibility of reporting that the account was “closed by consumer,” and it will appear that way on your report. Make sure you receive a confirmation letter from the creditor in case any discrepancies arise. Companies will note that you are aware of how to responsibly manage your accounts.

A great way to control your accounts is to close as many merchant cards as you can. These include cards you opened at stores to receive a one-time discount on large purchases. Once you have paid off the balance for your television or new wardrobe, take the initiative to close the account so that creditors will not see the account as another way to acquire debt. In addition, it is important to realize that revolving debt creates worse images on your credit report than does installment loan debt. Installment loan debt is that which creditors review for approval, or underwrite, every time you request a credit extension. This process is a regulated one that helps steer consumers away from financial burdens as it denies them loans that will lead them into further debt. However, you should still try to maintain healthy revolving debt as a means to build your credit.

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