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This seems like a contradiction, but it really is not. Many people think that to improve their credit score, they just have to pay off some debts and close their accounts. This is not exactly accurate. There are several reasons to think carefully before closing your accounts.

First, if you close an account you need (for example, if you close all your credit card accounts) then you will have to reapply for credit, and all those inquiries from lenders will cause your credit score to actually drop.

Secondly, most credit bureaus give high favorable points to those who have a good long-term credit history. That means that closing the credit card account you have had since college may actually hurt you in the long run. If you have credit accounts that you don’t use or if you have too many credit lines, then by all means pay off some and close them. Doing so may help your credit score – but only if you don’t close long-term accounts you need. In general, close the most recent accounts first and only when you are sure you will not need that credit in the near future. Closing your accounts is a bad idea if:

1) You will be applying for a loan soon. The closing of your accounts will make your credit score drop in the short term and will not allow you to qualify for good loan rates.

2) Closing your accounts will make your overall debt balance too high. If you owe $10 000 now and closing some accounts would leave you with only $1000 of possible credit, you are close to maxing out your credit – which gives you a bad credit rating.

In the short term, closing accounts will lower your credit score, but in the long run it can be beneficial.

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In February 2007, Patti Serrano joined me as we formed Business 101 (called Leadership and Coaching for Business back then) and we started this show on Saturday Nights (because it was the best time for both of us). As time went on, we changed to Sunday Nights and eventualy ended up on Monday Nights where we stayed for more than a year.

Today, as schedules change and life continues to “get in the way”, another change is about to take place. After a long discussion between Patti and myself, the conclusion became to incorporate Business 101 into the Podcaster Training Show. We will begin with this new incorporation starting Friday Night, July 11th, 2008.

Here’s how it will work:

Podcaster Training will go on as scheduled. Instead of having the normal aftershow, we will instead segue into the Business 101 Show. I will take the recording afterwards and split out the Business 101 portion and re-post it on the Show ID 20332 RSS Feed. Since we get a lot of download listeners on this show, this will enable them to keep up with Business 101 as usual. I will also incorporate the Business 101 Chat blog into The NMP Network site and will keep the blog updated as always.

Business 101 is designed to help the entreprenuer, from novice to experienced, and to answer those questions that you have about your business, to assist you in becoming the entreprenuer you are striving to be!

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