AVOID COMMON PITFALLS If you have an old debt collection on your credit reports, proceed carefully. Zwelling cautions against paying unless you can pay in full. Otherwise, he says, activity on the account could turn old history into a current problem. And if you zero out credit card balances, be aware that closing a credit card can hurt your score. That’s because it reduces the average age of your accounts and overall credit limit. If you’re tempted to close an account since you don’t expect to use it again, you may want to reconsider.
The article How to Use Your Tax Refund to Polish Your Credit originally appeared on NerdWallet.
BEV O’SHEA is a consumer credit expert at NerdWallet. Her work has been featured by USA Today and The Associated Press.
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