Is it bad for your credit to have a card you don t use?

Can Unused Credit Cards Damage Your Credit Score?

Maintaining unused credit cards may have detrimental effects on your creditworthiness. Lenders often implement a policy of closing inactive accounts, which can shrink your available credit and shorten your credit history. These factors are both crucial in determining your credit score.

How Unused Cards Affect Your Credit

1. Reduced Available Credit:

When a credit card is closed, the amount of available credit you have decreases. This can raise your credit utilization ratio, which is the percentage of your total credit that you are using. A high credit utilization ratio is seen by lenders as a sign of potential overspending and can negatively impact your credit score.

2. Shortened Credit History:

Your credit history is a measure of how long you have used credit responsibly. Closing an unused card removes it from your credit report, reducing the length of your credit history. A shorter credit history can make it more difficult to establish credit in the future and can lower your score.

Avoid Consequences by Using Unused Cards

To prevent the negative consequences of unused credit cards, it is advisable to use them regularly, even for minimal purchases. This will keep the accounts active and prevent them from being closed.

Responsible Card Use

While using unused cards is important, it is crucial to use them responsibly. Avoid carrying a balance or making large purchases that you cannot afford to pay off in full each month. Making timely payments and managing your credit wisely will help you maintain a healthy credit score.

Conclusion

Maintaining unused credit cards can have adverse effects on your credit. Lenders may close inactive accounts, reducing your available credit and shortening your credit history. To avoid these consequences, it is advisable to use unused cards regularly, even for small purchases. By using credit responsibly and maintaining a strong credit history, you can ensure your creditworthiness remains intact.