Credit cards significantly influence your credit record, reveals an expert's analysis
Irina Andrievskaya, the Director of Content and Analytics at the financial marketplace "Vyberu.ru", has shared insights on the impact of credit cards on a borrower's credit history in an interview with RG.RU.
Andrievskaya emphasized that using credit cards responsibly can have a positive impact on one's credit rating. Using one credit card where the limit is regularly spent and repaid demonstrates reliable credit management and timely repayments, both of which are favourable factors in a credit history.
However, Andrievskaya also warned that having multiple credit cards can present a double-edged sword. While having several credit cards might demonstrate a higher total available credit, which can positively affect the credit utilization ratio if managed well, it can also complicate credit management and increase the risk of missed payments.
Properly managed, multiple credit cards can help build a strong credit history by showing responsible credit usage and timely payments. However, mismanagement or accumulating excessive debt across multiple cards can harm the borrower's credit score and overall creditworthiness.
Andrievskaya also noted that late payments on credit card debt can have a negative impact on a borrower's credit history. Moreover, having a large number of open credit cards, even without any delinquencies, can be a reason for a credit application to be rejected.
In terms of closing credit cards, Andrievskaya advised those who use only one or two credit cards to close any extra ones. She did not discuss the specific impact of closing credit cards on one's credit rating but mentioned that closing extra credit cards can help avoid negatively impacting one's credit reputation.
Andrievskaya did not discuss the impact of closing credit cards on the credit utilization ratio or the credit limit. She also did not mention any specific steps to take after closing credit cards to maintain a good credit reputation.
In conclusion, using credit cards can have a significant impact on a borrower's credit history. It is essential to manage them responsibly, ensuring timely repayments and avoiding excessive debt. While having multiple credit cards can demonstrate a higher total available credit, it is crucial to maintain proper control to avoid potential risks to one's credit score.
A responsible use of credit cards can positively influence one's personal-finance and credit history, demonstrating reliable credit management and timely repayments. On the other hand, mismanagement of multiple credit cards, or accumulating excessive debt, can negatively impact a borrower's credit score and overall creditworthiness.
In terms of managing multiple credit cards, it's essential to maintain proper control to avoid potential risks to one's credit score, as having several credit cards might demonstrate a higher total available credit but can also complicate credit management.
