
Does the Number of Credit Cards I Have Affect My Credit Score?
Potential creditors rely heavily upon your credit score, or FICO, to determine whether you are a low- or high-risk borrower. The higher your score, the smaller the risk you pose to creditors. Because your credit score can impact your ability to do so much financially — whether you’re taking out a loan, opening a credit card, or trying to rent a home — it is important to know what factors affect your credit. While we all know that credit cards can affect your FICO score, it’s common to be unsure of how the number of credit cards you have can affect your score.
Your FICO score is weighted, with the type of credit that you use (in this case, credit cards) making up just 10% of your overall score. While having multiple credit cards will affect this category, it is very small in the grand scheme of your credit score. Therefore, simply having multiple credit cards does not have a great impact upon your credit score. Not paying off the debts on those cards could cause you a great deal of trouble, though, and have a large detrimental impact on your score.
Does that mean that you can have as many cards as you want, as long as you’re able to pay them off? Unfortunately, that is still not a great idea. Potential creditors know that having more credit cards means that you have more borrowed money as your disposal, and could easily rack up a significant amount of debt. If that were to happen, it is unlikely that you would be able to pay off any loans or borrowed funds that you took out from these creditors. So, while having multiple credit cards does not necessarily impact your credit score it could still impact your ability to be approved for future mortgages, loans, or lines of credit. It’s advisable to have just as many credit cards as you actually need and can pay off, rather having additional cards collecting dust in your wallet — and casting doubt in the minds of potential creditors.
