 |
Major credit cards and department store credit cards are examples of revolving accounts. Revolving accounts generally require a specified minimum payment each month that usually includes an interest or service charge. These accounts provide a maximum amount that you can charge and allows you to carry a balance. The service charge or interest rate declines as the debt is paid off. Revolving accounts generally have open terms and payments that vary according to your account balance. It’s important to note that a charge card is different from a credit card; a charge card requires you to pay off the balance each month, while a credit card allows you to carry a balance and make minimum monthly payments.
Your credit report will list any revolving accounts you may have now or have had in the recent past. The length of your revolving account history as well as your payment record will also factor into the report. The report will include the name and number of the account, the date it was opened, how long it was used, the payment history, and the status of the account. Regular, timely payments will be regarded favorably by potential creditors while multiple late payments could negatively affect your credit score. Having a strong revolving account payment history is important for those trying to establish a good credit history. Even if you don’t carry a balance and choose to pay off the balance each month, your credit rating will likely still benefit from your establishing a history of credit use.
|
|
