Does owning an unused credit card improve your cedit score?

Hello,

I was hoping for a bit of advice. I am quite proud of the fact that I have never owned a credit card (as a 24 year-old student). I was, however, told that this might mean that in the future my credit score might not be good enough to be approved for a mortgage.

I have used the Experian credit score checker and I seem to have a good rating. I do have several direct debits and a mobile phone contract, which are always paid successfully. I also have an unpaid student loan, which I believe shouldn't affect my credit score.

I was wondering whether banks look favourably on people who do not own credit cards. Or would it have the opposite effect, as they are unlikely to make much money off me in charges?

Would it be worth getting a credit card, even though I may not use it?

Any advice would be greatly appreciated!

Many thanks,

Archer86

Comments

  • TFD_2
    TFD_2 Posts: 907 Forumite
    Firstly do a search on the credit score checker... you'll discover that these scores are meaningless.

    Secondly getting a credit card is good for your credit rating, but you are best to use it regularly, paying off in full each month. This will reflect well and help in the future.
  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
    10,000 Posts Combo Breaker
    simply owning a CC is no use; they are looking for evidence that you can use credit well and repay

    so as TFD says get a crd , use it regularly and pay in full and on time
  • Set up a Direct Debit to pay the card off in full each month. Then you will not forget and get those dreaded late payment marks on your credit file.
    I want to be credit card and loan free by Christmas 2010
  • TFD_2
    TFD_2 Posts: 907 Forumite
    And not wanting to sound a little pedantic, but to clarify, you cannot ever "own" a credit card. The bank may issue you with one, but it's always their property.

    Not saying you have, but so many people look at credit as a right - you can see this by people fuming when their limits get reduced, etc. But it's not a right, and it's always worth bearing that in mind!
  • Paul_Varjak
    Paul_Varjak Posts: 4,627 Forumite
    Part of the Furniture 1,000 Posts Photogenic Combo Breaker
    I think anyone searching your credit file can only see your status, month by month, and what your current balance is.

    Use a credit card wisely and it is your friend, use it badly and it is your worst enemy. The fact that you have actually taken the time to ask the question, suggests to me that you are wise!

    Remember, you get certain rights when buying by credit card (certainly for amounts over £100) and even lesser amounts with cards that have good chargeback procedures (eg Visa).

    If you are thinking of getting a mortgage, have you thought of getting a credit card from the mortgage lender you are most likely to use? If you build a good credit relationship with them, that should stand you in good stead for the future.
  • Chris2000
    Chris2000 Posts: 318 Forumite
    Part of the Furniture Combo Breaker
    I think anyone searching your credit file can only see your status, month by month, and what your current balance is.
    With most cards they can now see a lot more than this, including a monthly history of credit limit and balance outstanding going back 6 years; whether the cardholder is paying only the minimum amount; and the number of cash withdrawals made last month.
  • robmatic
    robmatic Posts: 1,217 Forumite
    Do you actually have to use a credit card for it to show positively on your credit file? I thought it was late payments etc. that are recorded on the basic credit file, so if you have a card with a zero balance surely it will show as a source of credit that you are successfully paying on time each month?
  • CarineG
    CarineG Posts: 157 Forumite
    robmatic wrote: »
    Do you actually have to use a credit card for it to show positively on your credit file? I thought it was late payments etc. that are recorded on the basic credit file, so if you have a card with a zero balance surely it will show as a source of credit that you are successfully paying on time each month?


    I believe you do, it's worth using it even for a very small payment providing you pay your balance on time each month.
  • CannyJock
    CannyJock Posts: 3,838 Forumite
    1,000 Posts Combo Breaker
    If you use it and pay it in full, it'll report 00000000's
    If it's unused, it may report UUUUUUUU's
    "A child of five could understand this. Fetch me a child of five." - Groucho Marx
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