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Does Having Too Many Credit Cards Hurt Your Score?

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Having too many credit cards can penalize your credit score, but not for the reasons you might think. In truth, the only time that having lots of credit cards will hurt you is if you perpetually carry a balance on your cards. In that case, yes, it can be very damaging. If you do not typically carry a balance then it does not normally matter how many credit cards you have. (Read: How your credit score is calculated)

We get a lot of questions regarding having multiple credit accounts. Let’s take a look at one of these situations, and then break it down.

One of our readers, A. Brown, sent us this question:

Hello – I recently requested and received my credit report and score from Equifax. I was happy that it came back at 792. However, it stated that I have too many open accounts and too many recently opened accounts. Over the years I have had my fair share of credit cards, car loans, lines of credit. But I have always had a plan, and currently I have a $0 balance on most all of these open lines of credit. I do have one credit card with 6k on it, plus I have two mortgages. Will simply waiting until the accounts are no longer considered “new/recently opened” help me? I know my score is good, but I want it up over 800. Thanks.

A. Brown, Thanks for your question!

Let’s cover the basics first: The credit score you received might not actually be your FICO score. Check your report carefully to verify this.

Equifax itself might penalize your “score” for having too many open accounts, that does not mean that FICO does. Also, when you decide to borrow money each lender has a different set of qualifications you have to meet. Some lenders will reject you on the basis of having too many open accounts, but it is not a majority.

Lenders are usually far more concerned with how you are using the accounts you have open. When you apply for a line of credit, most lenders will check your FICO score, and not the scores from the individual bureaus. That is why it’s so important to make sure that the score you received was actually your FICO score, and not a score based off of another model.

Experian in particular is bad about this, but I have had it happen at TransUnion too. I am not assuming that Equifax is above passing off a FAKO score either. Just be sure to read your fine print before you make any decisions about what to do with your credit cards.

As far as Equifax goes, yes they do penalize your score based upon the number of accounts you have open. However, the reality is that closing those accounts out will penalize your FICO score more than having too many of them open. If you absolutely, positively feel you must close some of them out, then close your youngest cards, and not more than one account every three to six months.

You mentioned that you wanted to get your credit score up over 800. The best way to do that is actually to leave these accounts open and not borrow against them. You are exactly right to just let them age.

Statistically speaking, people with credit scores over 800 only use about 7% of their available credit. Start by figuring up the amount you have available to borrow vs. the amount you owe. If you can get that figure under ten percent then your scores will go up regardless of the number of accounts you have open.

Believe it or not there are some people out there carrying as many as 50 different credit cards. Yes, how many accounts you have matters and can slightly lower your score. How well you manage those accounts, and how much you owe on them matters far, far more.

If you give your accounts time to age, get your total debt to under 10 percent of your available credit, and you still do not see an improvement in your score, then I would wait a few months and try closing a low-limit, younger account out. Those with the smallest credit lines, and the shortest history should be the only ones you cut.

Have a question for us? Leave a comment below!

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9 Responses to “Does Having Too Many Credit Cards Hurt Your Score?”

  1. autumn Says:

    I used to have about 8 credit cards but I slowly cancelled them all. I refuse to open up a store credit card, no matter what the offer. So right now all I have is one credit card, my debit card and a carecredit card, which I hear mixed things about. I pay my bills on time, sometimes more than once a month. I was just wondering if having too few cards would hurt my score. In addition, I was wondering if the care credit card would hurt my score.
    thanks

  2. Matt Says:

    I am 36 make 100K and have no credit cards or savings. I am married with 4 kids 9-15. I have a mortgage (30year fixed 6.125%)I owe about 79K, payment is $800, 2 new cars with $359 5% (26K balance 5 years left) + $589 0% (28K balance 4 years left). Boat payment $150 6% ($6500 balance with 6 years left)

    My score is last I saw just under 700.

    How many credit cards should I get to boost my credit score? Should I try to get credit cards with the highest limit? If I do not use the credit cards will they still increase my credit score.

    I have always been against using money I did not have, but apparently this is not good for your credit score.

    Quote from above
    “If you give your accounts time to age, get your total debt to under 10 percent of your available credit”

    Does this only refer to credit cards? If I open available line of credit at the bank but do not use it would this also boost my available credit? Do mortgage and auto/boat loan balances get considered as available credit? Or do the count as debt so it equals out? Should I open 2 credit cards, 1 or 3?

    Please advise as to how I can boost my credit/FICO score?

  3. stacey Says:

    I am thinking of joining Identity Guard or something else to help monitor my accounts and to tell me what my score is. Is it worth it?

  4. GENE RILEY Says:

    i get a paycheck bi-weekly. can i split my credit card bill payment in half and pay them bi-weekly and will this help me pay them off quicker ?

  5. Mike Says:

    I was told that in-store credit cards that I don’t use are bad to keep open. So I closed 3 of them in one day: Kays, Empire Carpet and SYMS Clothing (Kays I’ve had for 10 years). Based on your article above, how badly did I just screw up my credit. I’m currently a 740-750, how many points could this move cost me. I still have a couple Visa’s and a Mastercard, 2 lease payments and a mortgage so how much should I be concerned?

  6. Eileen Shewchuk Says:

    Have business line of credit cards on my personal name with large amounts but continuously being paid down. This is affecting my credit score. How can I change this.

  7. Chels Says:

    Hello,
    I’m 22 and making 30k between a few jobs. My credit scores are 660-720 and I’ve just opened my second credit card because all three of my reports say my score could be higher with more available credit, in a few months should I go for a third? I’ve never maxed my first one out, I have autopay for my phone on it and then pay it off and I plan to set up my gym membership on the next one, so I’ll be usinf less than %15 of my new open credit. How much is too much open credit for someone in my income bracket?

  8. roger nonnweiler Says:

    I was recently duped into signing up for a department store credit card by an employee. She was a fast talker, and while I thought I was signing up for a free haircut, I ended up being approved for a Macy’s credit card. I only make $700 a month, have a $500 limit Visa that I continually max out and pay in full each month, and a BestBuy department store card with a $2200 limit that I use in emergencies, but sparingly and usually also pay in full each month I use it. I don’t want the Macy’s card and have not made any credit purchases yet. I’m successfully raising my credit score but now I’m stuck with a dilemma. Do I take the jab for closing a credit card (which is only 2 days old)or do I just sit on it and never use it, counterbalancing the jab of opening a new account with aging it? Which idea is best? Close it or sit on it?

  9. Mr Credit Card Says:

    The Macys card have no fees. And it is just a couple of days old. So I would not worry either way.

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