Inactivity on credit cards can harm your credit rating, despite being responsible. Accounting and modified credit utilization ratios are risks. Regular, minor use is recommended to maintain a positive credit profile. Do inactivity on your credit card your creditworthiness: This is how to have a credit card and not use it like a smart, responsible way to manage your finances. Well, not always while the credit card is unused, it seems harmless, but many credit card holders do not understand the effects of inactivity and how it is related to their creditworthiness. Let us delve a little deeper into the effects of inactivity on the credit card and how it affects your financial life. Factors that affect the creditworthiness before you start using any methods, it is important to know what affects your creditworthiness: Repayment History: The most important aspect is to pay your loans on time. Credit utilization: The ratio of your current credit use to your available credit. Length of credit history: Old credit history is generally favorable. Credit mix: A good mix of safe and unsecured loans improves your credibility. New credit requests: Too many applications over a short period of time may harm your score. How inactivity affects the credit rating 1. Credit utilization ratio: If you never use the card, you keep the rate low, which is good for your creditworthiness. However, if the issuer closes the account due to inactivity or lowering your credit limit, your use ratio is likely to rise, which could affect your creditworthiness. 2. Risk of account locking: Credit card issuers can close accounts without activity for long periods. While it may look like a problem, it can affect two components of credit values: credit age – if you cancel an old unused account, your average credit age can decrease. Available Credit – The cancellation of an account reduces your total credit limit, which affects your use ratio. 3.. Payment History: Because Payment History is the most important factor of your creditworthiness, the fact that you do not use your card can negatively affect your credit rating. What should you do instead? Use the card periodically: make small purchases once every few months. Pay it just as soon as possible to build your strong credit history. Set up car payments: Setting up a car payment for a small monthly subscription can not only ensure that the card is used, but it allows you to monitor the spending. Check it out periodically: Check if there are inactivity or annual fees associated with it. If there are no fees, it is worth keeping it open. Finally, even if you choose to completely ignore a credit card, inactivity can slowly reduce your credit profile. The best option is to use your card regularly, but generally for minor amounts, so that its presence can continue to positively affect your financial profile. Disclaimer: Mint has a merger with Fin-Techs to provide credit, you must share your information if you apply. These bonds do not affect our editorial content. This article only intends to educate and distribute awareness about credit needs such as loans, credit cards and creditworthiness. Mint does not promote or encourage credit as it has a set of risks such as high interest rates, hidden costs, etc. The control of your creditworthiness is absolutely first published: 14 Apr 2025, 04:20 IST
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