How much do you know about credit cards? Probably quite a lot – or so you might think. We’ve compiled a handy myth busting guide to equip you with the right credit card knowledge
Like the pot of gold at the end of the rainbow, this is an untruth. Having a small number of credit cards, or none at all, does not necessarily lead to a better credit score.
On the contrary, lenders will be less willing to accept your applications for credit because they have no idea how you manage your payments.
It is a widespread belief that we start out with a spotless credit record and then ‘lose points’ with missed payments and so on.
However, credit score is determined by credit history, so the longer your history is the better – so long as your cards are well-managed and bills are paid on time.
Not quite. Having credit cards which are used and paid off in full each month is indisputably good, but with the rising cost of living and mounting financial pressures of everyday life, this is not always possible for all of us.
If you are unable to use and pay off your credit card every month, the next best thing to do is use each of your credit cards and pay them down to 20% of the high credit limit – and make sure you meet at least the minimum payment by the due date.
While the outstanding amount will accumulate interest, this method will have less of an impact on your credit score than if your payment was late.
This is partially true, since these types of credit do indeed influence your credit rating. However, it is not limited to these: some utility companies, such as Yorkshire Water, are now linked to credit reporting agencies which means that customers who fail to pay off their water bills could see their credit score worsen before their very eyes.
Credit cards can prove useful in tough financial times, and comparing the market can help you find the best one to suit your personal circumstances.
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