What It Is and Why It Matters

When it comes to credit, there are different types and they all make up different parts of your overall credit score. Having an understanding of the differences and how they work is essential to building and maintaining your credit score. Revolving credit is a type of credit that doesn’t have a fixed amount of payments. You obtain a better credit rating through your revolving lines of credit by borrowing and repaying consistently.

Very few people realize how much of their credit score depends on their revolving credit and how they manage it. While it is a large percentage, simply having revolving trade lines is not the answer to a better credit score. Not only do you need to have them, you must also understand how to utilize them in order for them to benefit your credit file.

There is a delicate balance when it comes to your revolving credit and having too many or too few lines can diminish your potential. Before you make decisions about cancelling or applying for new revolving lines of credit, be sure to talk to a credit specialist about your current situation. Cancelling an existing trade line can put your credit history in jeopardy and is not necessarily the best option. If you find yourself on the other end of the spectrum with fewer revolving trade lines, it may be a good idea to consider obtaining more to achieve your highest potential score.

After you obtain your revolving trade lines, the other variable is your ability to manage and maintain those lines. Knowing your credit limit and the balance you should carry is critical to maintaining and improving your score. Keeping your balances low will allow you to obtain your highest potential. How responsible you are with maintaining your trade lines is what ultimately determines your credit score.

To learn more about revolving credit and how it works, contact a Tru Path Credit Specialist. If your credit score is too low to qualify for new revolving trade lines, there are other options that may be available to you and we are here to help.