First of all, I don’t just pick random authors or “financial experts” for the fun of it. My job is to help people with their financial and credit problems. When I see bad advice by so called financial experts that I know will hurt you, it is my duty to warn you.

I just read an article over at the American Chronicle that is absolutely wrong. If you listen to any of this, you’re going to find your credit scores hitting new all time lows.

Let me pick out a few excerpts from this garbage and show you what I mean.

“Moreover, you should slowly replace your credit cards for credit cards with higher amount limits but you shouldn’t keep the previous ones."

Ok, one major factor in your credit score is the age of credit lines. Obviously, the longer a positive trade line - the better it is for your credit score. A new credit line can temporarily have a negative impact because it's viewed as a new potential liability. Closing old credit lines and replacing then with new credit lines will probably be total destruction.

“What is really important is to maintain your credit card balances within a reasonable range so income to debt ratio (and consequently your credit score) won’t suffer.”

Here is the problem with this statement. Sure, keeping your credit card balances low will help your credit score but “income to debt ratio” is not a factor in your credit score. Don’t believe me, pull your credit and look for your income…it’s not there. Credit scores have nothing to do with income.

Debt to income will be considered when trying to buy a home or car, but nothing to do with actual credit scores.
 
“Thus, if you don’t really use them, if you just have them because they where offered for free, you should close them.”

Again, close a good account and your credit score will suffer, I guarantee it. Credit scores can really be reduced to simple math (kind of). Good account equals plus fico points. Remove that good account and you also remove those positive points.

Here is my problem and I have been saying for years. When it comes to financial matters; If you're going to publish advice that could impact the financial future of its readers, I think there should be some sort of certification classes. At the very least a disclaimer that says the author of this advice might be an idiot.

I don't know if the fact that this person actually owns a payday loan company who thrive on people with bad credit has any bearing on why this information is so wrong, but it's dangerous and I feel for anybody who actually followed it.