Do you have unused credit cards? Common sense might tell you, if you're not using them, close them; but our financial expert, Kevin Myeroff, says that can actually hurt your credit score.
"There are two parts of a credit card that really effect your credit score. One is the credit utilization ratio, so that's how much credit you have... how much of it are you using?"
Myeroff says you want to keep your balance under 30 percent. For example, if you have a $10,000 line of credit, you shouldn't carry a balance of more than $3,000.
Second is credit history, or how long you've been paying on your bill. If you close a card that's old, it could hurt your credit history because you're essentially erasing good credit history.
However, Myeroff says there are some cards you can close.
Cards with a large annual fee. If you're not using cards with a large fee, it's not worth paying it every year.
Newer cards. If you get rid of newer cards, you aren't erasing your long, positive history.
Cards with unfavorable terms. If you have a card with a balance and a high interest rate, you should switch to a card with a low interest rate.
