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I don't need credit, but I want to keep my credit score as high as possible, for when I might want a mortgage or come across a credit card with nice rewards.

I got a credit card with a borrowing limit of £500 and most places online say that you need to keep utilisation under 20-30%, but keeping it in the single digits (but not 0) is even better.

So, what is the lowest utilisation rate that allows me to build credit? Is something like 1% good enough?

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  • There are other ways to build credit than with a credit card. Also I managed to get a mortgage at a good rate at the time without ever having a credit card and having little to no credit accounts on my credit reports - known as a 'thin credit file'.
    – Jsk
    Oct 8, 2021 at 11:55
  • @Jsk that's fair enough, but that still leaves credit cards that give you casback (which seem useful to me)
    – Mike
    Oct 8, 2021 at 12:18

4 Answers 4

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In my personal experience no need to use a credit card (you can get 999 with Experian without it) to get a mortgage, after all you will normally be asked for 3 months of bank account statements to judge affordability.

Do a mobile phone contract in stead or similar service agreements if you must. Lenders will be more interested in the statements plus no defaults on your record.

The score is also a tool to make you use your credit card and spend money, plus an opportunity for the referencing agency to sell you advice about how to increase this secret thing - part common sense, and - surprise - part "use your credit card and spend money".

That I guess is the reason there is no "savings score", which could be just as relevant.

I can add that in several other European countries the whole concept is unheard of.

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  • I know I can get a mortgage, but isn't your rate at least partially influenced by your credit score? I have a high score on Experian, but other agencies show a non existent credit score, and a recent background check showed my credi to be something like 500 despite the Experian one being 967
    – Mike
    Oct 11, 2021 at 9:00
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    I think the banks would use their own judgement (or "scoring" if you like). I haven't had problems getting good rates without credit card usage. I think they will look at your income vs. your outgoing payments, and any missed payments. Whether outgoing payments go through a credit card or not, they can work out.
    – nsandersen
    Oct 11, 2021 at 11:40
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It's better to have something (a percentage higher than 0) than nothing. The lower your utilization rate, the better from a scoring standpoint.

Using less than 30% of your available credit is a guideline, not a rule. The 30% level is not a target, but rather is a maximum limit. Exceeding that level will have a significantly negative impact on credit scores. Some recommend 25% as a threshold.

The credit utilization percentage cut-off cannot realistically apply to credit scoring. Here's why?

  • Your score might change when utilization on an individual card reaches a certain percentage range, yet it might not change when the average of all your cards combined hits that same percentage or range.
  • Due to the multiple scorecard system, by which credit scores use different scoring factors and different weighting of the factors for different sets of credit experiences. The utilization range might not always apply in the same way to the same person, as the indicators of credit experience, such as length of credit history, number of accounts, payment history, etc change over time.
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Depending on the scoring model used, some experts recommend aiming to keep your credit utilization rate at 10% (or below) as a healthy goal to get the best credit score.

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  • That doesn't really answer the question, I'm concerned with the minimum spend
    – Mike
    Oct 11, 2021 at 8:57
  • @Mike Lower is better and something is better than nothing. Dec 20, 2021 at 13:18
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I got a clear answer to this from one of the credit agencies (TransUnion). They consider the green zone between 1% and 25%, which would mean 1% is the bare minimum.

I've tested this on my credit card, and it does look like both TransUnion and Experian respond positively to 1%.

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