I have been paying my bills on time. Recently, Chase closed my secured credit card stating they did away with the program. The action brought my score down 30 points. Why is it counted against me when I did not close the account?

This is a typical problem especially in this economic environment as more banks close inactive or sub-prime accounts. To answer your question, the credit report and the credit scoring algorithm cannot distinguish who closed the account. It merely shows an account was closed and changes your score accordingly. While this is not fair, it is the realities of the system.

Here are some tips to help that may help you in the future:

• 1. Find a replacement credit card. As you have now noticed, credit cards are a great way to build your credit score especially if you are always on time and pay the balance in full. The HSBC Classic MasterCard is our favorite secure credit card based on its costs, features, and member feedback.
• 2. Diversify your credit. When your credit starts to improve, have more than one credit card. The average consumer has 8-9 credit cards. We think 8-9 is too many but 2-3 credit cards from different banks is a great way to lessen the impact of changes at any one issuer.
• 3. Use your cards. Remember that banks view customers who don’t use their cards as a cost center at best and a liability at worse. Use your card once every few months for gas or at the grocery store as a way to keep the cards active while not overspending.

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