Some good info on how your credit cards relate to your credit score

Jack Guttentag has a good bit of advice on Inman News today about how best to take care of your credit score as it relates to your credit cards.

The one piece of advice that I have to add to this: cancelling cards doesn't help your score. FICO looks at closed accounts the same as open accounts. If you had six cards, but now you have only two, your score will not be positively affected, and might even be hurt by what FICO perceives as the potential for you to re-open those accounts and go shopping.

Mr. Guttentag refers to a 'genie' in the article as the little system that figures out your score... I would rather see it referred to as a 'weasel'. None of the calculations make any sense, and some of my clients will have late loan payments, bad debt, and little history, and still have an 800+ score. Others, myself included, have perfect payment history for many years, but are carrying a little balance on a credit card (and have a few closed accounts - in good standing), and get dinged for it.

The best advice is to just pay everything on time. If you miss a payment, just make sure you get it paid before the next billing cycle starts. That's when it hits your credit report -- after the missed payment is 30 days late. Think of that as your 'grace' period, but don't use it more than you absolutely have to.