Yours credit score It’s like a report card for your borrowing history. When you want to borrow money, lenders check this score to see how risky it is to lend to you. Higher scores usually mean lower risk. Now, the big question is how does it happen to be multiple? Credit CardImpact on your credit score? Well, it’s like this: As long as you’re careful about maintaining a good credit score, you can have multiple credit cards. But, here’s the catch – if your credit cards are brand new, your credit score may be lower. This is because having new cards reduces the average age of your credit history.
Your credit score is calculated using five main factors, and some of these factors are more important than others.
Your credit score is calculated using five main factors, and some of these factors are more important than others.
- Payment History (35%): It’s bigger, carries the most weight. It’s all about how good you are at paying off your debt. Having multiple credit cards means you have to keep track of payments on each one. Missing payments can seriously damage your credit score.
- Loan-to-debt ratio (30%): It measures how much of your available credit you are using. Going over 30% could bring your score down. Having multiple credit cards can increase your total available credit, but it’s important not to go over that 30% limit.
- Average age of your credit card (15%): The age of your credit card matters. Having new cards can lower your average credit age, which can result in a lower credit score. People with longer credit histories tend to have better scores.
- Types of Credit (10%): The variety of credit you have also matters. Lenders like to see a mix of credit cards, mortgages and installment loans. Simply having multiple credit cards may not be ideal for your credit score.
- New Credit Accounts (10%): Opening a new credit account may temporarily lower your score. Too many new accounts may be a sign of risk to lenders. Therefore, it is wise not to open too many credit cards in a short period of time.
conclusion
If you’re thinking of getting more than one credit card, don’t get them all at once. This can reduce the average age of your credit history, which can hurt your credit score. If you already have multiple cards, it is better not to close them, as this can increase your total credit and improve your score. Instead, use one or two regularly, keep track of payments, check your credit score regularly, and make sure you don’t go over the 30% limit on your credit cards.
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