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Question By
wingsfrompye

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quick way to gain 10 points -- what to do with CCs?
I have 4 credit cards, 2 that are nearly full and 2 that have zero balances, which I plan to close and replace with others that have better reward systems.
I'm also going to be applying for a cash out refinance mortgage shortly, and I need to gain 10 points in order to get their best loan rate. So my question is, do I close any of the empty credit card accounts before applying for the mortgage, and should I apply for one or both of the new cards I plan to start using soon?
I don't know if the new cards would make me look better because I have more available credit or worse for the inquiry/ies. Please help!

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I suggest keeping the 2 cards with zero balances open. If you close them, your credit to balance ratio will go WAY up and your score will drop. You may also lose points with the average age of your accounts by closing a couple of them if they're old accounts. 

The best way to raise your score is to pay down those balances. It really hurts your score when your cards are close to maxed out.

If you apply for more credit it will hurt your score in the short term and help your score in the long term. It will place a hard inquiry on your credit report, which causes you to lose points. Your average age of accounts will also go down which hurts your score. However, your debt to balance ratio will go down, which will help your score.

So the fastest way to get 10 credit score points?

- Pay down those balances

- Keep your zero balanace cards open

- Hold off on opening any new credit right now

Reply by
wingsfrompye

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Thank you very much! That sounds like a reasonable plan. Not fast, but nothing worthwhile usually is. :-)

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