Does My Credit Score Go Down if I Don’t Use My Credit Card?

Many individuals wonder if not using a credit card can negatively impact their credit score. While inactivity itself does not directly harm your score, prolonged inactivity can lead to unfavorable outcomes. Understanding how credit card issuers manage inactive accounts can help guide responsible credit management.

Key Elements of Your Credit Score

Your credit score is a numerical representation of your creditworthiness, influenced by several factors. Payment history holds the most significant weight, typically accounting for 35% of your FICO score. Consistently making on-time payments demonstrates responsible financial behavior and is important for a healthy credit score.

Credit utilization, the amount of credit you are using compared to your total available credit, typically makes up 30% of your FICO score. Keeping your credit utilization low, generally below 30%, indicates that you are not overly reliant on borrowed funds and can positively influence your score.

The length of your credit history also plays a role, accounting for about 15% of your FICO score. A longer credit history with well-managed accounts provides lenders with more data to assess your reliability over time. The age of your oldest account, newest account, and the average age of all your accounts are considered in this calculation.

Credit mix, or the variety of credit accounts you possess, contributes around 10% to your FICO score. This includes a blend of revolving accounts like credit cards and installment loans such as mortgages or auto loans. Demonstrating the ability to manage different types of credit responsibly can be beneficial, though opening unnecessary accounts solely for this purpose is not advised. New credit accounts for approximately 10% of your score. Opening multiple new credit accounts in a short period can be viewed as higher risk, especially due to hard inquiries that temporarily reduce your score.

Inactivity and Your Credit Score

Not using a credit card does not directly cause your credit score to decline. Credit scoring models evaluate reported activity, such as payments made and balances carried, rather than the frequency of card usage. As long as a credit card account remains open and in good standing, its credit limit continues to contribute to your total available credit.

This contribution to your overall available credit can be advantageous for your credit utilization ratio, especially if you carry balances on other cards. An unused card with an available limit helps to keep your total utilization lower. An open, inactive account continues to age, positively contributing to the length of your credit history.

The core of credit scoring revolves around how you manage debt, not how often you use every credit line extended to you. The primary concern with inactivity arises when it prompts an account closure by the issuer.

When Inactivity Leads to Account Closure

Inactivity can lead to an indirect negative impact if the credit card issuer decides to close your account. Banks may close inactive accounts for various reasons, including the cost of maintaining unused lines of credit, perceived risk, or to align with internal policies. Issuers often prefer to see some activity to justify keeping an account open.

The closure of a credit card account can significantly affect your credit utilization ratio. When an account is closed, its credit limit is removed from your total available credit. If you have balances on other revolving accounts, this reduction in available credit can cause your overall credit utilization ratio to increase, potentially lowering your score.

Account closure can also impact the length of your credit history. While a closed account with a positive payment history typically remains on your credit report for up to 10 years, its eventual removal can shorten the average age of your accounts. If the closed card was one of your oldest accounts, this could negatively influence your score over time. Closing an account means losing access to that credit line, which could be a resource for emergencies. It also might alter your credit mix, though this factor generally has a smaller impact on your score.

Strategies for Managing Inactive Accounts

To prevent a credit card from being closed due to inactivity, implementing a few simple strategies can be effective. Making small, occasional purchases on the card and then paying them off immediately signals activity to the issuer without incurring interest or accumulating debt. This could be a small recurring subscription or a minor everyday expense.

Setting up a small, essential bill, such as a streaming service, to automatically charge to the card each month and then arranging for autopay from your bank account to cover it is another viable option. This ensures consistent, minimal activity. Regularly reviewing statements for all your credit cards, even inactive ones, helps monitor for any fraudulent activity and confirms the account remains open.

If you are concerned about a card’s inactivity or receive a notice of potential closure, contacting the credit card issuer directly can provide clarity on their inactivity policy. It is generally advisable to maintain some level of activity on credit cards you wish to keep open, particularly older accounts that contribute positively to your credit history length.