4 Ways Your Credit Card Habits Can Lift or Sink Your Credit Score

Avoid making these simple mistakes that can damage your credit score.

Kallee Feuz Jun 21, 2018

Article originally published on June 21, 2018 and refreshed on March 18, 2021.

For better or worse, your credit card use — or lack of it — is affecting your credit score. And your credit score can impact major life events like buying a home, renting an apartment or landing a job.

When you apply for a credit card, pay your bill, or close an account, the data shows up on your credit report. That information is synthesized into a credit score — a single, three-digit number between 300 and 850 — that helps lenders decide whether to lend you money and how much interest to charge.

Credit cards are one of the most effective ways to show lenders that you can manage credit responsibly. But you can also do damage to your credit profile by making simple mistakes. Whether your credit card activity lifts or sinks your credit score depends on the following behaviors.

Credit Score Factor #1: How much credit you use

While eschewing credit cards altogether might be financially prudent for the compulsive spender, it won’t do any favors for your credit score. Neither will tapping into all of your available credit and maxing out your card.

Instead, it’s typically recommended that you use 20-30 percent of your available credit at any given time. That's because your credit utilization rate — how much you owe relative to how much credit is extended — can impact up to 30 percent of your credit score. As a general rule, the less credit you use, the more points you get. However, it is better to borrow something rather than nothing. If you do not use credit at all, lenders actually consider you a greater credit risk.

Credit Score Factor #2: How long you hang onto your credit card(s)

An “out with the old, in with the new” approach to credit cards will hurt your credit score in at least two ways. First, closing an account can shorten your credit history. And second, closing an account reduces the amount of available credit you have.

Stick with your longest-held credit cards for as long as possible, even if you bring new ones into the mix. Put the bulk of your spending on cards with the best rewards, and make occasional purchases on older cards to maintain the length of your credit history, which accounts for 15 percent of your FICO score. 

Credit Score Factor #3: When you pay your bill

Paying your credit card bill on time each month is one of the easiest and most effective ways to improve your credit. Your payment history — whether you pay bills on time — comprises 35 percent of your FICO score. Under the Fair Credit Reporting Act, your credit report retains late payment information for seven years. And even a single late payment can drop your score. The longer a bill goes unpaid, the more detrimental it is to your credit score.

Credit Score Factor #4: If you apply for new credit cards

As your life circumstances and spending habits change, so do your credit card needs. The basic credit card that you could qualify for as a college student may not offer the rewards that you could be racking up as a working professional who travels frequently.

Along with increasing your rewards potential, adding a credit card like the Zions Bank Vivid Rewards Visa® Credit Card* may increase your available credit and improve your credit utilization ratio. Beware, however, of opening several new credit accounts in a short period of time — it can signal greater risk to lenders.

Take your credit score temperature annually to see how you’re doing. You’re entitled to a free copy of your credit report from each of the three major reporting companies — Equifax, Experian, and TransUnion — every week during the COVID-19 pandemic. If you have not checked your credit score within the last year, request a free copy at

A credit card can help you maximize your purchasing power and strengthen your credit score. Compare the Zions Bank Visa® Credit Card* offerings on our website to find the card that best fits your lifestyle.

*Credit cards are subject to credit approval. Terms, conditions and restrictions apply. See banker for details.

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