Unused credit on single card effect credit score?

mburke09

Hi All,

I'm 26 and trying to build up my credit score, I've just been accepted for my first credit card with a credit limit of £3900 a month. There is no way I will be spending that much, am I likely to only spend between £200/300 a month on it.

I've read that having lots of unused credit (in the form of lots of unused credit cards) affecting your credit score negatively. Is this the case if you have one card with lots of available credit which you fail to make use of?

Thanks in advance.
Matt

CakeCrusader

From what I can work out it's the opposite, it looks bad if your credit card usage is high as it looks like you're struggling with your cashflow. It may help if you use it, and pay the whole balance off every month

Nebulous2

mburke09 wrote: »

Hi All,

I'm 26 and trying to build up my credit score, I've just been accepted for my first credit card with a credit limit of £3900 a month. There is no way I will be spending that much, am I likely to only spend between £200/300 a month on it.

I've read that having lots of unused credit (in the form of lots of unused credit cards) affecting your credit score negatively. Is this the case if you have one card with lots of available credit which you fail to make use of?

Thanks in advance.
Matt

It will have no effect whatsoever, unless you are on a very low part-time wage. £3900 isn't a particularly large credit limit. Using it to spend £2-300 a month and paying in full after the statement has arrived will work very well to show you can handle credit responsibly.

forgotmyname

My "score" dropped because i bought something worth more than 50% of my CC limit, even though i paid it off in full when the statement arrived.

The "scores" they give are utter crap. Stop looking as the " score " unless its for amusement.

mburke09

Thanks for the answers everyone!

Ben8282

Forget about building up your credit score and concentrate on establishing a good payment history.
£3900 is not a large credit limit.
Spending £200-300pm and repaying in full is not using a large % of your available credit. Assuming you pay by direct debit and the 'balance' reporting date is the day prior to the payment due date, the maximum balance on the card at any one time that could potentially be reported would be unlikely to exceed £600, say 15% of the card limit.
With low limit cards there is always the problem of balancing the utilisation ratio against the potential maximum spend that you could put through the card(s) each month.

By the way, as I recently explained in another thread to somebody else who made the same mistake, you do NOT have a credit limit of £3900 PER-MONTH. You have a credit limit of £3900 which is the maximum balance which will be allowed on the card at any one time.