Credit cards improve credit rating?

M.Holloway

I was just told by my bank that having a credit card (and not using it) would improve my credit rating...is this true?

binaryuniverse

In a way yes. However, not using it probably wouldn't help you much and the bank may ending up making the account dormant after a few months anyway. The best thing to do is to make your normal monthly purchases (ie food/petrol and the like) on the card and then pay it off IN FULL each month from your bank account. This will improve your rating.

Daisy_Duck

M.Holloway wrote: »

I was just told by my bank that having a credit card (and not using it) would improve my credit rating...is this true?

Yes. It shows potential lenders that you have and can manage credit.

You do not necessarily have to spend on them, they will report to the CRAs anyway showing the required monthly green zeros. I have cards showing on my report that I've not used in as long as I can remember but they're still there showing as active.

If your lender does mark an account as dormant then you could just spend on it once, there is no need to put your monthly spending on it. If you are happier using it to ensure it keeps active then you can simply just put one thing a month on it and pay it off.

M.Holloway

I've never used a credit card in my life! I fear the temptation to spend may be too great. And the one they offered my was 0% interest for 13 months :0

Daisy_Duck

M.Holloway wrote: »

I've never used a credit card in my life! I fear the temptation to spend may be too great. And the one they offered my was 0% interest for 13 months :0

LOL!
Depends on your motives for raising your credit worthiness really... if you're thinking of applying for a mortgage/loan etc then you might want to think about it. If you don't and you don't trust yourself with a credit card, then avoid them!

bluezone101

rush card is great one for a better use

Daisy_Duck

bluezone101 wrote: »

rush card is great one for a better use

Not quite sure what you mean but having just looked at the Rush card it appears to be a prepaid debit card and so will have no bearing on your credit rating as it wouldn't be reported to the CRAs.

wiggler

Daisy_Duck wrote: »

Yes. It shows potential lenders that you have and can manage credit.

You do not necessarily have to spend on them, they will report to the CRAs anyway showing the required monthly green zeros. I have cards showing on my report that I've not used in as long as I can remember but they're still there showing as active.

If your lender does mark an account as dormant then you could just spend on it once, there is no need to put your monthly spending on it. If you are happier using it to ensure it keeps active then you can simply just put one thing a month on it and pay it off.

i Thought that having unused credit was detrimental to your credit rating, in case you went "bad" so to speak

debtdestroyer007

any credit account is good for ur credit rating, as long as u dont miss payments, dont max it out nor keep it dormant for long periods......

never-in-doubt

wiggler wrote: »

i Thought that having unused credit was detrimental to your credit rating, in case you went "bad" so to speak

Only if you have lots of unused accounts, if you don't have one and then get one and not use it, you'll be fine.

Different if you had 10 cards with £10k limits - they would then affect you cos in essence you could spend 10 x £10k plus whatever the new account gave you.

Make sense