As awareness about the importance of credit score rises people are beginning to focus on what makes their credit report look healthy. While some aspects of credit behavior impact the credit score in an obvious way some may not be so obvious yet may have an important bearing on the rating. Paying on time is the most obvious factor that will impact any individual’s credit health; however over use of the credit card may not appear to be such an apparent reason for a low rating. There are still a lot of doubts about what may or may not have a bearing on the score calculation. One such is discussed here.
Do Small Credit Card Purchases Affect the Credit Score?
Credit score usage pattern and payment history has an impact on the credit score but everything about credit card usage will not have a bearing on credit score. So what impacts the score?
Now we come to what in the normal course does not impact the rating. The size of transactions whether big or small has no impact on the rating calculation. So if you have multiple or few credit card transactions that are not big ticket purchases there is no reason to worry as they will not have any impact on the rating of an individual. On the contrary if you keep your balances low then it is good sign as the credit utilization ratio will not be very high which a good thing is for the score.
Not using card is not a good idea contrary to what a few people might believe. If you have credit card/s but rarely use it or them it will be a good idea to consider using them and charging small transactions on them and then paying on time. This will generate a positive credit trail which results in good score ultimately.
Though we said earlier that the size of transaction does not matter as long as you pay on time but remember if the charge is too high and it makes the utilization shoot up the as explained earlier it could be detrimental to credit health as it exhibits credit hungry behavior or too much dependence on the card which can be perceived as high risk behavior.
So to put it in a nutshell; small credit card purchases do not affect credit score. If at all they may have an impact it can only be positive for someone who does not use a card at all and decides to use it for small transactions and pays on time.
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