credit card causes score drop
in Credit File & Ratings
7 replies 1.3K views
I have never taken much notice of credit scores as I have no need of credit but a friend showed me Noddle and out of curiosity I signed up. It transpired that not being in debt and not having a credit card meant that my credit file was considered 'thin'. So I applied for a card. Got it. Used it. Paid in full. Then my score dropped by about 30 points over the first three months and a further drop of 3 or 4 points over each of the next 3 months. I didn't understand why and signed up to Clearscore. Their report showed two negatives. One that I had a low credit limit and the other that my % utilization was high. I thought that the idea was to get a card, use the credit and pay it off to prove you are a good risk. I was told not to just put the card away as it was necessary to build up a good payment history. It doesn't look as if using credit helps to improve your score but if not using it doesn't help either what is the point?
This discussion has been closed.
Latest MSE News and Guides