Even though people have bad credit they still want to have housing.  If you have bad credit what this shows to the lender is that you are weak financially and may default.

So banks, traditional institutions will not readily offer you …

Not!

Your credit score is very important when trying to obtain mortgage.  Closing an account does not help you credit score and can possibly hurt it. 

It is true that you can have to many open accounts. But by closing the account …