Question

Neil believes that the more credit cards you have in your wallet, the more credit worthy you appear to others. If you were Neil's credit counselor, which of the following statements would you share with him?

A.
It looks great on your credit report if you have several credit cards with a balance.

B.
It is more important to take good care of 1 or 2 loans or credit cards, than it is to show you have several.

C.
You appear more credit worthy when you have less cards, as long as the balance on each card is high and the minimum payment is made each month.

D.
You are right on target with your belief. Just make sure you keep all of your balances just below the credit limit on each card.

Answer 1

B.

It's more important to take good care of 1–2 loans or cards than to simply show many. Lenders and credit scoring models weigh on-time payment history and low credit utilization much more heavily than raw card count. Having many cards with balances (or high balances on few cards) can hurt your score; keeping balances low (ideally under 30% of each card’s limit, and under 10% if you want an even stronger score), paying on time, and maintaining older accounts will help most.