What is a revolving credit line?

A revolving credit line is a type of credit that gives you access to a set limit of funds that you can borrow, repay, and use again. Revolving credit lines work very similarly to credit cards, though they will appear as different types of accounts on your credit file.

With a revolving credit line, you’re required to make payments by the due date; otherwise, the unpaid balance will remain on your account and may be reported as a missed or late payment.

How does Pave being a revolving credit line help with building my credit score?

A revolving credit line is beneficial to your credit building journey because:

1. It diversifies the types of credit on your credit file, making your profile look more well-rounded to lenders.
2. It has a credit limit, which contributes to the total credit available on your credit file. When managed responsibly, a higher overall credit limit can improve your credit utilisation rate, which is the percentage of your available credit that you’re using. Keeping your usage below 25% of your total limit shows lenders that you're not overly reliant on credit.
3. It contributes to your payment history, which makes up the largest portion of your credit score. Since we report the status of your membership fees, making on-time payments helps you build a strong, positive track record that shows lenders you can consistently meet your financial obligations.