We all know (or should know) that when we apply for a car loan, a credit card account, or a lease… Read more Read more
The Total Number of Credit Cards You Have Doesn't Greatly Affect Your Credit Score
When the credit bureaus calculate your credit score. the number of credit cards you have is a very minor part of the equation. As Investopedia explains [emphasis mine]:
Your payment history makes up 35% of your FICO score, while your total debt owed amounts to 30% of your final FICO score. Making up the final 15%, 10% and 10% of your FICO score are the length of your credit history, any new credit that you have taken on, and the type of credit you have used.
When calculating your individual FICO score, the number of credit cards that you have will influence the smallest weighted categor y: the type of credit that you use.
The number of credit accounts you have altogether—not just credit cards, but things like auto loans, mortgages, student loans, and store revolving accounts—make up 10% of your score. You could have one or two cards or twenty-two, but the much more important
factors are if you pay your bills on time and how you're utilizing your credit.
Owning Several Cards Is Fine, at Least in Terms of Your Credit Score
The average number of credit cards Americans own is three to four. According to Credit Karma. there is a correlation between having a high credit score (800+) and having more credit cards (7), compared to people with lower scores. This could be because people with higher credit scores are able to open more credit cards, though. People who chase travel rewards in particular tend to have a great many cards open at a time (though not as much as the record holder in the Guinness Book of World Records, who has 1,497 cards with a $1.7 million credit line and nearly perfect credit).
To give you a guideline of how many credit accounts is considered good for us normal people, Mint's credit reporting tool tells me 0-5 accounts is "poor." 6-12 is "not bad," 13-21 is "good," and 22 or more accounts (open or closed) is "excellent." Again, though, that's for all types of credit and for just a small slice of the credit score pie .