- Oct 12, 2009
To keep the line open but not pay interest charges. I have a BoA card since 1988. I use it every few months so they don't close it. It's a large line of unused credit. See below:Its probably a good idea to buy items on credit now and then just to maintain or build up your score.
Payment History – 35%
As you might expect, the repayment of past debt is a major factor in the calculation of credit scores. It helps determine future long-term payment behavior. Both revolving credit (i.e. credit cards) and installment loans (i.e. mortgage) are included in payment history calculations. Although installment loans take a bit more precedence over revolving credit. That’s why one of the best ways to improve or maintain a good score is to make consistent, on-time payments.
Amounts Owed – 30%
This category is basically credit utilization or the percentage of available credit being used/borrowed. Credit score formulas “see” borrowers who constantly reach or exceed their credit limit as a potential risk. That is why it’s a good idea to keep low credit card balances and not overextend your credit utilization ratio.
Length of Credit History – 15%
This factor is based on the length of time all credit accounts have been open. It also includes the timeframe since an account’s most recent transaction. Newer credit users could have a more difficult time achieving a high score than those who have a credit history. Since those with a longer credit history have more data on which to base their payment history.
Credit Mix – 10%
FICO® Scores consider the combination of credit cards, retail accounts, installment loans, finance company accounts and mortgage loans. Credit mix is not a crucial factor in determining your FICO Score unless there’s very little other information from which to base a score.
New Credit – 10%
Today’s higher use of credit factors into FICO® Score calculations. Still, opening several new credit accounts in a short period of time can signify greater risk – especially for borrowers with a short credit history. So how one shops for credit and within what timeframe can affect a FICO Score in a number of ways.