Knowing this, avoid closing older and unused accounts. If you have a handful of credit cards you never use, instead of closing the accounts, simply put the credit cards in a safe place and forget about them. Although you don't want to have too many open accounts, having five or six credit card accounts open, even though you only actually use two or three cards can be beneficial. Likewise, if you have a five-year car loan, for example, showing three, four or five years of positive payment history (with no late or skipped payments) will benefit you.
Strategy 4: Only Apply for Credit When It's Needed, Then Shop for the Best Rates on Loans and Credit Cards. If you're in the market for a bunch of new appliances or other big-ticket items, it's common for consumers to walk into a retailer and be offered a discount and a good financing deal on a large purchase, if they open a charge or credit card account with that retailer. Before applying for that store's credit card, read the fine print. Determine what your interest rate will be and what fees are associated with the card.
Next, only apply for new credit if you absolutely need it. Applying for a retail store card you're going to use once or twice, when you could just as easily use an existing credit card, might not be the best idea. Applying for and obtaining multiple new credit cards (including store credit cards) within a several month period will be detrimental to your credit score. Unless you can save a significant amount of money on your purchase over time and can justify accepting a reduction in your credit score, don't apply for credit you don't actually need.
