Five credit card myths that could be ruining your credit score

2 March 2020

Avoid these five common myths about credit cards to protect your credit score


Commonly held misconceptions about credit cards could be putting credit scores across the UK at risk, according to new findings from TotallyMoney.

The financial experts found that 59% of adults wrongly believe that it’s essential to use your credit card every month or risk losing it.

While only 18% of adults knew that spending over 25% of your credit limit could damage your credit score.

Shockingly, over 54% of adults didn’t know that paying off an outstanding balance in full each month could boost their credit score.

Five credit card myths to avoid

Avoid these five credit card myths as they could be putting your credit score at risk. 

1) It’s OK to max out your credit card

Maxing out your credit cards or going close to your credit limit may suggest a heavy reliance on credit for everyday living which could increase your risk of building up debt you can’t repay.

As a rule of thumb, you should keep the balance on your credit card to 25% of your total credit limit.

2) Interest isn’t added if you make minimum repayments

Although the minimum repayments are set by your credit card provider, you will incur interest if you don’t clear your balance.

Interest is only waived during an interest-free offer or by paying off your balance in full each month.

Failing to clear your balance can have a negative impact on your credit score. It could also take up to 26 years to clear your credit card debt on average, if you just made minimum repayments. 

3) Your credit score doesn’t affect the credit deals available to you

A high credit score suggests to a provider that you are a trustworthy person to lend to.

If you seem like a reliable borrower, you’re more likely to access favourable offers and products.

 4) You have to use your credit card every month

You don’t have to use your credit card every month.

The most important thing is to keep your credit usage to under 25% of your total credit limit and clear your balance each month. 

5) You’re more likely to be approved for credit from your bank

Banks do not take how long you’ve been a customer with them into consideration when you apply for credit.

Their decision will be based on your credit history, and how reliable you are as a borrower.

While it may be tempting to stick with your bank for ease, it’s important to shop around if you’re looking for a new credit card.

See what offers are available and if you could get a better deal elsewhere.

Try using an eligibility calculator before applying as this will help give you an idea of the cards you’re most likely to be approved for.

How to improve your credit score

It’s important to keep on top of your credit score as it affects your ability to take out anything from a loan to a mobile phone contract or even car insurance.  

Follow these three simple tips to help improve your credit score.

1) Check your credit report regularly

It’s important to monitor your credit history regularly. This will help you identify any errors that might be affecting your score.

If you spot any inaccuracies of your file, try to get them sorted as soon as possible.

Regularly checking your credit score will also help you identify any instances of fraud.

2) Register to vote

Registering to vote is a quick and easy way to boost your credit rating.

All you have to do is sign up at GOV.UK/register-to-vote.

3) Stay on top of your repayments

Clearing your credit card balance each month as well as keeping on top of other repayments such as a personal loan, will help improve your credit score.

It shows lenders that you are reliable with credit and can manage your debts.

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