Your score is based on many factors, such as payment history, amounts owed vs. amount of credit available (credit utilization), age of credit history, new credit, and type of credit.

It seems like you make all your payments on time, which means your payment history should be good. You don’t use much of your available credit, which means your utilization is low, and you’ve had your card for a few years, which means your history is established.

I think the fairly high limit is fine as long as you aren’t looking to take out additional large lines of credit. In fact, a higher limit can help your score because it keeps your utilization lower. Based on limited info, your situation shouldn’t affect your score negatively.

If I have a Credit Card with a credit limit > $10,000, but have used it sparingly over the past couple of years (say, not more than $200 annually with punctual payments), does that affect my credit score negatively ?

Thanks !

The account is helping you because it helps your average age of credit. The older the average age of your accounts, the better. It also helps your credit utilization rate because you have that amount of credit that you are not (and will not use).

The only way it could hurt you is the type of credit it is – a store branded charge account. These are generally labeled as consumer finance accounts, which tend to have a lower rating than regular credit cards or secured loans like a mortgage or car note.

But, I’m not sure it’s going to be a big deal for your credit score. I would think that overall it is more toward neutral, but I’m not 100% on that.

Any thoughts on what action, if any, I should take? Is it helping, hurting, neutral?

Your post revealed the truth about credit score as this information will help to maintain a high credit score. Thanks for the valuable post.

Jeff Clair

1) you’re allowed to get a free copy of your credit report once a year (order it from their sites) and

2) check this report to make sure the info is correct. Really. There were some serious errors on mine, including my employer and address – one hadn’t been updated in 10 years and the other was just wrong.

You covered it more extensively. Awesome job!!!! People definitely need this info, because once they know how their credit score is determined they can take the necessary steps to improve it.

Some other articles claim this reduction to be 5 points per new store card opened.

This article brings in a different view to the whole mystery how opening new credit cards affect your credit. “For example, if your scores are lower by just 10 points your interest rate can jump from 6.58% to 7.39%. On a $275,000, 30 year mortgage that is a difference of $150 each month. $1,800 each year. Saving 10% on those golf clubs suddenly doesn’t seem like such a great idea any longer does it?”

Another factor to consider is that different lenders may weight different things in your credit report. Paying your mortgage on time (or early) will be weighted more heavily by a mortgage company whereas GMAC will weight your car loans more heavily. They tweak it in subtle ways to try and glean just a little edge.

It all boils down to “pay your bills on time!”