Your score won't automatically drop if you stop using your credit card, but it can drop if the account is closed. Credit card companies will close accounts that aren't used regularly. To keep cards active, you could put small recurring purchases on them or make sure to use them every few months.
Your credit score is unaffected by not using your credit card. However, your issuer could ultimately shut the account as a result of inactivity, which might harm your score by reducing the total amount of credit you have access to. It's crucial not to register for accounts you don't actually need because of this.
Your limit is more likely to be lowered if your card is inactive.
A 700 credit score is considered a good score on the most common credit score range, which runs from 300 to 850. How does your score compare with others? You're within the good credit score range, which runs from 690 to 719.
Various weighted factors mean that even with no credit, your credit score could still be low because the length of your credit history or credit mix, for example, could also be low.
Key points about: not using your credit card
Your credit card account may be closed due to inactivity if you don't use it. You could overlook fraudulent charges if you're not regularly reviewing your account. If your credit card account is closed, it could negatively impact your credit score.
A good guideline is the 30% rule: Use no more than 30% of your credit limit to keep your debt-to-credit ratio strong. Staying under 10% is even better. In a real-life budget, the 30% rule works like this: If you have a card with a $1,000 credit limit, it's best not to have more than a $300 balance at any time.
In this case, your credit score could take a hit even if you have been paying responsibly. High credit limits can help boost your credit scores because, if you don't use much of your credit cards' available balance, your overall credit utilization will be low.
Credit card inactivity will eventually result in your account being closed. A closed account can have a negative impact on your credit score, so consider keeping your cards open and active whenever possible.
If you only pay the minimum due on your credit card, the remaining balance may accrue interest and increase your credit utilization, which could negatively affect your credit scores and make it harder to get out of debt.
South Burlington, Vt., is the city with the highest credit score, while Detroit is the city with the lowest, according to personal finance site WalletHub.
No, unused credit cards do not hurt your credit score. However, if the card has an outstanding balance, it's critical to keep making payments on time, as late or missed payments can negatively impact your score.
You Have Late or Missing Payments
If you are more than 30 days past due on a payment, credit issuers will likely report the delinquency to at least one of the three major credit bureaus, likely resulting in a drop in your score. Payments that become 60 or 90 days past due will have an even greater effect on your score.
While you don't want to carry any balance, make sure you're still using your credit card regularly — at least on small charges. Otherwise, your credit card issuer can potentially close your account after months or years of inactivity.
It boils down to your financial habits and income. A good rule of thumb is to aim for a credit limit that's about 20-30% of your annual income. For example, if you make $50,000 a year, a good credit limit might be around $10,000 to $15,000.
Keeping a low credit utilization ratio is good, but having too many credit cards with zero balance may negatively impact your credit score. If your credit cards have zero balance for several years due to inactivity, your credit card issuer might stop sending account updates to credit bureaus.
There are some differences around how the various data elements on a credit report factor into the score calculations. Although credit scoring models vary, generally, credit scores from 660 to 724 are considered good; 725 to 759 are considered very good; and 760 and up are considered excellent.
If you don't use your credit card, the card issuer may close your account. You are also more susceptible to fraud if you aren't vigilant about checking up on the inactive card, and fraudulent charges can affect your credit rating and finances.
Using more of your credit card balance than usual — even if you pay on time — can reduce your score until a new, lower balance is reported the following month. Closed accounts and lower credit limits can also result in lower scores even if your payment behavior has not changed.
Credit scoring models may consider the highest utilization rate on a revolving account in addition to your overall utilization rate. Having a card with a very high utilization rate, such as 100%, can hurt your credit score even if your overall utilization is relatively low.
Credit scoring models also need to see activity in the account to include it in your score calculation. If you haven't used the card for a number of months, it might show too little activity be included, which can result in a credit score drop.
And when it comes to credit, 850 is the highest the FICO® Score☉ scale goes. For more and more U.S. consumers, practice is making perfect. According to recent Experian data, 1.54% of consumers have a "perfect" FICO® Score of 850. That's up from 1.31% two years earlier.
In fact, in our research on a representative sample of millions of individuals from April 2023, we found that the average FICO Score in the United States for people with no current debt was 737, which is almost 20 points higher than the national average of 718.