How Using Your Debit Card Affects Your Credit Score

February 20, 2019

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Having a credit card is a big responsibility, especially when you consider the average credit card interest rate is 19.24% , it can also be an expensive option.  For some, the debit card is the only plastic to use but how does solely using debit affect your credit score?  Considering a high FICO score is essential for securing the best deal when for you it comes to borrowing money for a house or car, building it is important. However using your debit card exclusively will do nothing to improve your credit score.  For that you will need a credit card and you will need to use it.  Many credit issuers will close inactive accounts that that will cause your FICO score to drop as your credit history makes up 15% of your FICO score.  So it may be a good idea to have your Netflix bill charged to your credit card and pay the card off from your bank account.  But there may be some redemption for your debit card when it comes to your credit score. FICO announced the test launch of the UltraFICO system this year, which will use data from your bank accounts, such as balance, payments, number of overdrafts and such to determine your credit score.  It is a service you need to sign up for and you determine which accounts are used. However this is a new system and it is unknown if it will improve your chances of securing credit from a lender.

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SOURCE: Apartment Therapy

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