Is it good for your credit to have a credit line open, that I don't use?

Answer 1

I work for a Mortgage Broker and deal with credit issues all the time. ITS A GOOD IDEA TO HAVE A CREDIT LINE OPEN EVEN IF YOU DON'T USE IT BECAUSE your score goes up. It goes up because it shows to the bureaus that you have credit available to you...however if its a high credit limit this might cause you problems i.e. if the credit limit is $10,000 or above

bottom line...keep it but don't use it to avoid finance charges. Your credit card company can't close your account and this open line will give you credit. I BASE THIS INFORMATION TO BE TRUE AND ACCURATE GIVEN MY EXPERIENCE WITH CREDIT AND AS A BUSINESS PROFESSIONAL DEALING DIRECTLY WITH CREDIT...anything else is bullshit

Answer 2

I think the answer to this question is, "It depends."

If you are specifically referring to the type of credit line a bank offers to customers so you do not overdraw your checking account, and you have no need for the line of credit, I would say that it does hurt to simply have the line of credit available. And, you will see that much the way your credit card line is increased over time (assuming payments are timely) so too, a line of credit offered as an extra to your checking account will have neither a positive nor negative impact on your day-to-day. The advantage can come when credit information is requested by someone from whom you may be trying to get a loan, mortgage or additional credit card. When asked about your account, included in the information is the size of (but not necessarly exact figure) your line of credit and how well you maintain it. People dispensing the information very often will say someone maintains his line of credit "excellently", not based on how much you borrow (although that information may be asked), but how current you are on payments to the account. Seeing nothing outstanding willusually provide a response that you are an excellent credit risk, although you may never have used the crit line.

I hope this answers your question.

Answer 3

I was told by a bank that having one credit line open that is not in use with a credit limit of $500 or less does not negatively affect your credit. However, if the limit is over that then it does start to impact the score because of the ratio of debt to income.

She also told me that I should use it every three months for small purchases under $50 and payoff the balances the next month. This shows a good payback rating.

Answer 4

No its not good. You should have too many credit lines open because it might look like you owe a lot of people and can be turned down for loans if you have to many credit lines open. you should close it out. If not it could hurt you later on when your not expecting it to.

Answer 5

Hi hooger,

The simple answer is, it's neither good or bad.

Having it open will give you credit depth as time goes on.

Regarding the open credit misunderstanding; having too much available credit at any given time could show the potential for a max out situation, but it depends on the depth of your credit profile. (from the first date a creditor reported) so having ten cards or many LOC with a ton of available credit is okay, if you have shown the abiltiy over a long period of time.(many, many years)

The best way to find out is to keep an eye on your credit.

I have LO's that have clients with a high net worth with an EXTREME amount of availabe credit, IE: Over $250,000.00 worth, and they have 800+ scores.

But they are typically over 50 and had excellent credit for a long time..

Answer 6

No.
You build a good credit history by having a good record of repayment. Basically you want to be able to show that you can repay your debts.