Does Credit Score Go Up If You Don't Use It?

Your credit score won't improve simply by avoiding credit use. While many people believe that staying away from credit cards and loans protects their financial standing, this approach can actually hurt their credit score over time. Credit scoring models need to see consistent, responsible credit management to assess your creditworthiness. Complete credit inactivity provides limited evidence for lenders to evaluate your ability to handle credit responsibly.

Key Takeaways

  • Credit inactivity doesn't improve your score - Credit scoring models require ongoing responsible usage to maintain and build scores
  • Unused accounts may be closed - Credit card issuers often close accounts with no activity, which shortens your credit history
  • Optimal utilisation is 1-10% - Using a small amount of available credit shows responsible management
  • Regular small purchases work best - Monthly transactions followed by full payments demonstrate active credit management
  • Keep old accounts active - Make small purchases on older cards to prevent closures and maintain credit history length

How Credit Scoring Actually Works

Credit Utilisation Matters More Than You Think

Your credit utilisation ratio accounts for 30% of your credit score calculation. The common misconception is that 0% utilisation is ideal, but credit scoring models actually prefer to see some usage between 1-10% of your total available credit.

When you never use your credit cards, your utilisation stays at 0%, which provides no evidence of your ability to manage credit responsibly. Lenders want to see that you can use credit and pay it back consistently.

Payment History Requires Active Accounts

Payment history represents 35% of your credit score - the largest single factor. You can't build a positive payment history without having active credit accounts to pay. Regular monthly payments, even for small amounts, show lenders a consistent pattern of responsible behaviour.

What Happens When You Don't Use Credit

Account Closures and Their Impact

Credit card companies view inactive accounts as unprofitable and typically close accounts after 6-24 months of inactivity. When an issuer closes your account for inactivity:

  • Your total available credit decreases immediately
  • Your credit utilisation ratio increases on the remaining accounts
  • Your credit history length may be shortened
  • Your future borrowing capacity appears limited to lenders

Missed Credit Building Opportunities

When you avoid using credit, you miss opportunities to demonstrate payment reliability, show credit management skills, and build relationships with lenders that could lead to better interest rates and terms in the future.

The Right Way to Use Credit for Score Improvement

Strategic Small Purchases

Making small, regular purchases on your credit cards provides the activity needed to maintain accounts while keeping utilisation low. Consider these approaches:

Monthly subscription payments: Set up one recurring bill on each credit card, such as streaming services, phone bills, or gym memberships.

Small weekly purchases: Buy everyday items like gas, groceries, or online purchases under $50.

Automatic Payment Setup

Configure automatic full balance payments to ensure you never miss due dates. This combination of regular usage and timely payments creates the ideal scenario for credit score improvement.

Monthly Monitoring

Check your credit accounts monthly to verify all transactions are legitimate, confirm payments processed correctly, and monitor credit utilisation across all accounts.

Simple Monthly Action Plan

  1. Make at least one small purchase on each credit card
  2. Pay off full balances before due dates
  3. Keep overall utilisation under 10%
  4. Monitor all account statements for accuracy
  5. Maintain activity on older accounts to prevent closures

Building vs. Avoiding Credit

Your credit score reflects your credit management skills, not your ability to avoid credit entirely. Smart credit management means using your available credit wisely - making small purchases, paying balances in full, and maintaining low utilisation ratios.

The difference between good and excellent credit can save thousands of dollars on major purchases like homes and cars. Active credit management leads to higher credit limits, better loan terms, and increased financial flexibility when you need it most.

Regular, responsible use of credit accounts demonstrates to lenders that you can handle borrowed money appropriately. This ongoing evidence of creditworthiness is what drives score improvements over time, not credit avoidance.

At Easy Credit Repair, we help Australians understand how credit really works and develop strategies for long-term financial success. Our team provides personalised guidance to help you build and maintain strong credit through proper account management.

Ready to take control of your credit health? Check out our services or get a free quote today.

Disclaimer: All information provided is based on research and our professional views only. Individual financial situations vary, and this content should not be considered personal financial advice. If you have specific questions about your credit situation, please reach out to us for personalised guidance.


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