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Are unused lines of credit good for your score?
My credit score is finally climbing back up into the "good" category and I have been receiving pre-qualified offers for a $3500 line of credit from Elastic Bank. They themselves admit it is an expensive form of credit, if you use it. I have three credit cards with a combined $7500 credit limit, and I use them more for rebuilding credit than actually needing them to make it until payday. My credit utilization ration is typically around 10%, occasionally less when I am able to pay the card balances off, and rarely over 30% unless an unexpected expense comes along. When that happens I budget to pay the balance down to get back into the 10% neighborhood as fast as possible. I'm wondering if the line of credit from Elastic would be a good way to help my credit utilization ratio even more, and to a lesser extent, my "mix of credit" rating. I don't anticipate ever having to use it and my thought is to use it simply as a tool to help my credit score. Is there "method to this madness", or are there too many down sides to the idea? I recently acquired my fourth credit card and cancelled a paid-off high-interest card with a small CL, so I have three total. I'm a little concerned about the hit my credit score will take if I accept this line of credit offer just a couple of weeks after getting my latest credit card and canceling my high-interest one. Thanks for any thoughts and input!

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I've never heard of elastic bank, but if it is expensive to use the account, it may be expensive to simply have the account. Did you check to see what the fees are, even if you don't use it? I would guess that this would be a "revolving" line of credit, so it would NOT help your credit mix. In my opinion I don't think that you should open this account, it will ding your credit doing so and it really isn't going to add that much credit to your profile and you said you have low utilization on your cards anyway, so it really is not necessary for you to worry about utlization percentages.

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TryingToUnderstand, thank you for your input; that was much more helpful than the previous reply. I was specifically asking if such a line of credit would help, and with your info I know it won't. So I'm going to pass on the offer. Elastic Bank appears to be one of those places that targets individuals who might be vulnerable or desperate for cash for whatever reason; a cash advance of $1000, for example, would end up costing the borrower $1501.11 (amount of loan plus "fees and charges") over ten months, the time required to pay back the loan. As long as you never borrow any money, however, there are no charges, so I was wondering if it was a way to help one's credit score, as long as one refrained from using it at all. Glad to know it won't. It was interesting to review their website however; I think they count on people just filling out the application form and not reading the fine print.

Thanks again!

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TryingToUnderstand, thank you, that was the input I was looking for. I'm going to pass on the offer from Elastic Bank. They appear to be one of those places that targets individuals who might be in need of immediate cash for whatever reason; a cash advance of $1000, for example, would end up costing the borrower $1501.11 (amount of loan plus "fees and charges") over ten months, the time required to pay back the loan. As long as you never borrow any money, however, there are no charges, so I was wondering if it was a way to help one's credit score, as long as one refrained from using it at all. Glad to know it won't. It was interesting to review their website however; I think they count on people just filling out the application form and not reading the fine print.

Thanks again!

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Please take the time to read the articles here so you can understand how credit works and how to imoprove it, since providing that education is the purpose of Credit Karma. Cancelling any credit card isss a guaranteed hurt to your credit score.  I haveone with high interest and a $500 limit that I keep just because the limit adds to my total.  The "method to the madness" comes from dooing as I, and many others here, have done and that is to learn about credit, make needed changes, build the portfolio and enjoy the benefits of that knowledge.  As for taking on that credit line you proposed, I don't think so for now. Not until after you have truly learned how to play the credit game.

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