Revolving credit, like credit cards, can have a direct impact on the credit utilization portion of your credit score.
Credit utilization sees how much available credit you are using. It is the second most important factor in your score.
Revolving credit can positively or negatively affect your credit score, depending on how wisely you use it.
To improve your credit score, it is recommended that you keep your revolving credit utilization below 10%.
Revolving credit can be a useful financial tool to build your credit history if you use it responsibly.
It typically comes with high interest rates. It can be problematic if you do not pay your balance in full each month.
Making sure you pay on time in full will also help you qualify for a new revolving line of credit.
Use responsibly. As it is similar to other types of loan, only take if necessary and if you're confident in paying back.
Keeping your credit utilization ratio low and paying off balance in full each month can help boost your credit score.