For many years many media sources advised consumers who were unable to control their spending to literally put their credit cards “on ice” and to freeze them in a block of water for emergency use only. But by freezing their spending habits (and their cards), consumers may actually be harming their credit scores.
The credit bureaus want to make sure that consumers are using all their available credit in a responsible manner. If someone stops using their lines of credit altogether, then there will be no chance to build a new history with positive data to outshine the negative past.
With the current credit crunch affecting everyone, credit card companies are also in the process of closing down credit accounts that haven’t been used. This move can reduce the total line of available credit for a consumer. With a reduction in available credit, there will be an increase in the credit utilization ration (the amount of credit being used versus a person’s entire credit line) on a consumers account. This can negatively impact ones credit score as well.
The best way to contribute positively to your credit score is to not turn a blind eye to your credit. Read all incoming material from your credit card company to make sure they aren’t about to close your line of credit, pay off the balances on time and use those emergency credit cards wisely.
That doesn’t mean going on a major shopping spree to show activity on the card. It means making small purchases like buying a tank of gas or purchasing some movie tickets at least every six months. Then pay off those small balances in full and on time.
