How does a no-limit charge card affect your credit score?
Apparently it is up to the credit card company on how they want to report your available balance. Another disadvantage to the no-limit   credit card may not be apparent to   most people, but it is something noted   by organizations like The Motley Fool,   which is expert in many issues of   finance and investment. Part of your   credit  score, about 30%, considers   the amount of money you have borrowed,   and the limit on your present credit   cards. A no-limit credit card company   may report your limit as $0 if you   have not used the card, or they may   report  a maximum limit available to   you. They may not, nor are they   obligated, to report times when you   put tons of expenses on a credit  card   and then paid them off. While some companies will report your   timely payments and paid off amounts,   others simply report an extremely low   limit. For instance if you spent $100   US Dollars (USD), your limit might be   considered $100 USD, or it may merely   be reported as zero. You’ll need to   check with a credit card company on   how they report payments and limits on   a no-limit credit card before you   obtain one. Some people who are   scrupulous are paying off their cards   at the end of each month suffer major   losses to their credit score, without   even realizing it, if their spending   ability is rated at zero, or their   payments don’t count toward showing   credit worthiness. Source
MrChrister's answer is just plain wrong. Your history of carrying debt or paying interest has nothing to do with your credit score. The biggest factors are payment history, debt to available credit ratio and length of credit history. If you have active credit accounts for 5 years, have 10-15k in limits on credit cards and put gas and groceries on a credit card that is paid in full each month, you'll have a top notch credit rating. There is no way to tell from a credit report whether you carry a balance for pay in full. Anyone who gets into debt to improve a credit score is ignorant of the process. If you have bad credit, here's how you improve it: Believe it or not, this is done as a service to you. The reason for this has to do with a fundamental difference between a credit card account and a checking account.  With a credit card account, there is no money in the account; every charge is borrowed money. When you get to your credit limit, your credit transactions will start getting declined, but if the bank does for some reason let one get approved, it's not a big deal for anyone; it just means that you owe a little more than your credit limit. Note that (almost) every credit card transaction today is an electronic transaction.  A checking account, however, has real money in it. When it is gone, it is gone. When a balance inquiry is done, the bank has no way of knowing how many checks you've written that have not been cashed yet. It is a customer's responsibility to know exactly how much money is available to spend.  If you write more checks than you have money for in your account, technically you have committed a crime. Unfortunately, there are too many people now that are not taking the responsibility of calculating their own checking account balance seriously, and bad checks are written all the time. When a bank allows these transactions to be paid even though you don't have enough money in your account, they are preventing a crime from being committed by you. The fee is a finance charge for loaning you the money, but it is also there to encourage you not to spend more than you have.  Even if you use a debit card, it is still tied to a checking account, and the bank doesn't know if you have written enough checks to overdraw your account or not. It is still your responsibility to keep track of your own available balance.  Every time this happens to you, thank the bank as you pay this fee, and then commit to keeping your own running balance and always knowing how much you have left in your account. "Any kind of credit contract such as a mobile phone contract (could be SIM only or with a handset) would also help increase your number of accounts and demonstrate a track record of responsible management and repayments. If you have a Pay As You Go phone at present consider a SIM only contract with the same network, and if your parents currently pay for your phone consider if it would be worth switching it into your own name. Also make sure that you are registered on the Electoral Role at your permanent address and have at least a minimum payment direct debit set up on your credit card (even though you state you intend to repay in full) to make sure you don't forget a payment as this will disproportionately affect your score when combined with young age and few other accounts. Lastly ensure that you have a decent amount of ""head room"" on your rolling credit accounts like credit cards and aren't using more than 80% of the credit available to you through your monthly spending, if necessary by asking for an increased limit from your company (and then not using it)." 8 hard inquiries spread over two years is not a negative factor, with a score of 750. Real question #1: How much of your credit limits are you currently using? Less than 30% of your credit limits is good. Less than 15% is even better, 10% is great You don't need to wait X amount of days after applying for a mortgage or a card to increase your chances of getting approved for something else. You do need to be conscious of how many hard pulls you have done in a reporting period though, but again as I said, 8 spread over two years is not a whole lot. Real question #2: What negative things do you have in your credit history? Young age, income, delinquent payments, bankruptcies, low limits? Some of these negative factors are catch-22's (low limits, young age = low limits because of age and young credit history)  but these contribute to how much institutions would be willing to lend you "No. That's pretty unlikely. Card issuers typically base your rate on your credit score. Paying down debt reduces your percent of available credit used, and improves your score until you are in the 1-20% range. That's optimum. To this issuer, you are one of a million customers, there's no emotion in this, just numbers to them. For what it's worth, if a card issuer raises your rate, you are permitted to ""not accept"" the rate, stop using the card for new charges, and pay at the current rate. Of course this doesn't apply to zero interest deals, only to increases to your regular rate." I also had a student loan and glad you are taking a good look on interest rate as it really makes a huge difference. One of the strategies I followed was since my credit improved as I stepped out of school. I took advantage of a good 0 percent credit card. I applied for discover and got a decent credit limit. There are 2 particular things you are looking for in a credit card in this situation  Usually the initial $0 transaction charge is only for a couple of months so ensure you take advantage of that. What is the benefit: Imagine being able to pay off that higher interest rate balance with 0% and not have to worry about it immediately. That way you save on the interest you would be paying and stress as well Watch out for: Although you have to ensure that you do payoff the money you paid through the 0 percent credit card ( which may have been put off for a year or even 15 months or so) other wise you may have to pay it all at once as the offer is expiring. Note: for credit cards ensure to note when the 0% is expiring as that is usually not mentioned on the statement and you may have to call the customer service. I was in a similar situation and was able to pay it all off fairly quickly. I am sure you will as well. "As documented in MyFICO (http://www.myfico.com/credit-education/whats-in-your-credit-score/), there are several factors that affect credit scores. Payment history (35%) The first thing any lender wants to know is whether you've paid past   credit accounts on time. This is one of the most important factors in   a FICO® Score. As @Ben Miller mentioned, checking your credit report to determine whether or not late payments were reported to credit bureaus will give you a sense of whether or not this was effected. You mentioned several bounced payments, which certainly could have caused this. This would be my largest concern with a closed account, is to investigate why and what was reported to the bureaus, and in turn, other lenders. Also, since this has the highest impact on credit scores (35%), it's arguably, the most important. This is further detailed here, which details the public record and late payment effect on your score. Amounts owed (30%) Having credit accounts and owing money on them does not necessarily   mean you are a high-risk borrower with a low FICO® Score....However,   when a high percentage of a person's available credit is been used,   this can indicate that a person is overextended, and is more likely to   make late or missed payments. Given that this card was closed, whatever your credit limit was is now no longer added into your total credit limit. However, your utilization on that card is gone (assuming it gets paid off), depending on any other credit lines, and since you reported ""heavy use"" that could be a positive impact, though likely not. Length of credit history (15%) In general, a longer credit history will increase your FICO® Scores.   However, even people who haven't been using credit long may have high   FICO Scores, depending on how the rest of the credit report looks. Depending how old your card was, and particularly since this was your only credit card, it will likely impact your average age of credit lines, depending on other lines of credit (loans etc) you have open. This accounts for about 15% of your score, so not as large of an impact as the first two.  Credit mix in use (10%) FICO Scores will consider your mix of credit cards, retail accounts,   installment loans, finance company accounts and mortgage loans. Given that this was your only credit card, your loan mix has been reduced (possibly to none). New credit (10%) Research shows that opening several credit accounts in a short period   of time represents a greater risk - especially for people who don't   have a long credit history. This focuses on credit inquiries, which as you mentioned, you will likely have another either re-opening this credit card or opening another at some point in the future.  Regardless, paying off the rest of that card is a priority, as interest rates on average credit cards are over 13%, and often higher (source). This rate comes into play when not paying the balance in full every month, and also as @Ben Miller suggested, I would not utilize a credit card without being able to pay it in full. It can often be a dangerous cycle of debt." "Your total debt is equal to your total non-credit debt (student loans, car loans) + your total available credit.   This is the truth of the ""low balance"" fear from lenders that you had heard about. Your credit utilization is across all of your cards.   So if you have two cards, both with 15K limits and one is maxed out and one is empty, that is 50% utilization.   If you have both cards with 7.5K balances, that is also 50% utilization. For the 8 cards that are paid off and still open, after you buy a house, I'd close any cards you aren't using.  Not everyone will agree with this. If possible, I would close the 8 cards now and pay off the 15K balance before buying a house.  If it's hard to pay it off now, it will be harder when you have a mortgage and home maintenance costs. If you want to buy the house before you pay off all of your credit card debt, I'd still close the 8 cards that are already paid off and pay down your last card to 4K (or less) to get under 25% utilization. The credit rating bureaus do not publish exactly how a different utilization rate of credit will affect your score, but it is known that lower utilization will improve your score.  FICO calls this ""Proportion of credit lines used (proportion of balances to total credit limits on certain types of revolving accounts)"" Also, the longevity of your credit history is based on type of account (credit cards, car loans, etc.) so if you keep one credit card open, you still keep your long ""history"" with credit cards on your credit report.  FICO calls this ""Time since accounts opened, by specific type of account"""