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What Is a Revolving Account?

4 min read

Last Updated: February 14, 2025

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Key Takeaways

Revolving accounts are credit accounts that you can borrow against multiple times, such as credit cards.
If you lack revolving accounts, your credit score may not be as high as it could be.
You could add revolving credit accounts to your credit file by getting a credit card.

Your credit score depends on the information in your credit report. Many factors can help or hurt your credit score. When you check your credit, the credit reporting agency may provide a list of relevant factors. While the list doesn’t tell you whether you have a good or bad credit score, it may highlight factors you should pay attention to, including “lack of recent revolving account information”. This message means a new revolving credit account may improve your credit mix.

If a lack of revolving accounts is a factor impacting your credit score, opening and responsibly using a revolving account, like a credit card, could help your credit score.

Comparing revolving credit with installment loans

Revolving and installment accounts are two types of credit accounts that may appear on your credit report.

Installment loans: These are loans that have a predetermined repayment period that you pay off with regular (i.e., installment) payments. Examples of installment credit accounts include auto loans, mortgages, student loans, and personal loans.
Revolving credit accounts: These are credit lines that you can borrow against multiple times within a set limit. As you repay your revolving balance, you restore your credit limit. Common examples include credit cards, personal lines of credit, and home equity lines of credit.

Both installment loans and revolving credit accounts can impact your credit score, according to the Fair Isaac Corporation (FICO). ² For example, your payment history with both types of accounts can be important.

Additionally, the portion of your installment loan debt that you’ve paid can affect your score. However, the portion of your revolving account’s credit limits that you’re using—called your credit utilization rate—is a separate scoring factor. Only using a small portion of your account’s credit limit is typically better for your credit score, according to FICO.²

Can a lack of revolving accounts impact your credit?

Having a revolving account won’t automatically give you a better credit score, but lacking a revolving credit account may limit your credit mix, which is a factor in credit scoring.

Having a mix of installment and revolving credit accounts may have a positive influence on your credit score based on info from the Federal Deposit Insurance Corporation (FDIC). As a result, the lack of revolving credit accounts could also impact on your credit score.

Also, unlike an installment loan, you have control over how much you charge and pay each month with your credit card. Opening a credit card, avoiding high balances, and paying the bills on time can help show lenders that you can responsibly manage a credit line.

How many revolving credit accounts do you need?

Even one revolving account that you regularly use may be enough. Opening multiple accounts might impact your credit score, but it depends on the entirety of your credit report and the credit score model. Having a mix of revolving accounts and installment credit accounts can have a positive influence on your credit score, but it’s also important not to have more credit accounts than you can manage responsibly.

How to add revolving accounts to your credit history

If you don’t have any revolving accounts, one way to get started could be to open a credit card. But when you apply for a credit card, the resulting hard inquiry can impact your credit score—even if you’re not approved.

Did you know?

With Discover’s pre-approval tool, you can see your eligibility for any Discover credit card. You can then choose your best option and submit an application. Keep in mind, submitting an application will result in a hard inquiry.

See If You’re Pre-Approved

How do you stay on top of revolving credit?

While revolving credit is often part of a healthy credit file, it’s important to manage revolving debt responsibly. Otherwise, you could face late fees or unmanageable bills. The following steps may help you keep revolving credit accounts in check:

Whenever possible, repay your entire balance. That way, you can avoid interest fees and keep your credit utilization ratio to a minimum.
If you can’t repay your entire balance, make sure you cover at least your monthly minimum payment by the due date.
Only use your revolving credit account to cover purchases you can afford in cash.
Check your credit statement frequently to identify any suspicious charges or incorrect information that could hurt your credit score.

A lack of revolving credit could impact your credit score, but whether you should add a revolving credit account would depend on your overall financial situation. If you can successfully manage a new revolving credit account, then it might be beneficial to have one.

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