More credits cards bad for credit rating?

[WeeB]

I was just wondering if the more credit cards you have the worse it is for your credit rating?

[JustMike]

If you make your minimum payments, I cannot see how that would be true.

Several (excessive?) credit cards allow for higher debt potential and creditors will see that as a strike against you.

Why have more than one or two cards in the first place?

[gedwards]

To many can potentially have a negative impact on your credit score in several ways. First each time you apply for credit the credit card company accesses your credit history. Every time anyone checks your credit history (including if you check it yourself) that is logged against your credit history report. Having to many "hits" on your credit report does actually lower your score (as it looks like you are apply for a lot of credit in many places) so if you apply for many credit cards over a short period of time it will have an impact.

Second, one component of your credit score also looks at how much available credit you have. This has less to do with the number of credit cards than the total credit limit of all of your available credit (including line of credits, CC's etc). If a lender feels you have to much available credit given your credit history, income etc that also will have a negative impact.

Personally I would attempt to have as few as possible. Get rid of as many department store cards as possible and there really is no need to have more than one of any type of card (ie 2 different mastercards). It is often simpler to try and increase the limit on a few cards and get rids of other lesser used ones.

[m85d1]

To many can potentially have a negative impact on your credit score in several ways. First each time you apply for credit the credit card company accesses your credit history. Every time anyone checks your credit history (including if you check it yourself) that is logged against your credit history report. Having to many "hits" on your credit report does actually lower your score (as it looks like you are apply for a lot of credit in many places) so if you apply for many credit cards over a short period of time it will have an impact.



Are you sure? I thought you will be the only one that get to see it.

[ynot]

(including if you check it yourself)
Checking your own credit report does not affect your credit score.

[gedwards]

ynot is correct. As I said when anyone checks your credit report (including yourself) that it is LOGGED against your credit report. In fact this is considered a "soft" inquiry and does not impact your score. If you get a copy of your own credit report you would see your inquiry included on the report.

The "hits" I referred to are all of the "hard" inquiries that are made by lenders when you apply for credit. These do have an impact on your score.

As far as who sees it - I am not sure if the lender would be able to see if you checked your own credit history or not. What they see may not be exactly the same as what you see if you get your own report. Either way it wouldn't impact your score.

[johnsa]

To many can potentially have a negative impact on your credit score in several ways. First each time you apply for credit the credit card company accesses your credit history. Every time anyone checks your credit history (including if you check it yourself) that is logged against your credit history report. Having to many "hits" on your credit report does actually lower your score (as it looks like you are apply for a lot of credit in many places) so if you apply for many credit cards over a short period of time it will have an impact.

Second, one component of your credit score also looks at how much available credit you have. This has less to do with the number of credit cards than the total credit limit of all of your available credit (including line of credits, CC's etc). If a lender feels you have to much available credit given your credit history, income etc that also will have a negative impact.

Personally I would attempt to have as few as possible. Get rid of as many department store cards as possible and there really is no need to have more than one of any type of card (ie 2 different mastercards). It is often simpler to try and increase the limit on a few cards and get rids of other lesser used ones.

Exactly correct! The credit score will be reduced by the number or credit bureau "hits" form each of the companies , the total amount of "available" credit, and the biggee will eventually be total "utilized" credit.

Stick to 2 cards. One for everyday use..should be your favourite "points" or "bonuses" card. The second should be for emergency/backup only...Utilize it a few times per year to keep it active.

Eventhough I work for a major bank, my main card is the Canadian Tire M/C..I don't think it can be beat by other points/airmiles or even cash back cards (unless you charge over 10,000 per year on your cashback card and get the maximum cashback!

[johnsa]

To many can potentially have a negative impact on your credit score in several ways. First each time you apply for credit the credit card company accesses your credit history. Every time anyone checks your credit history (including if you check it yourself) that is logged against your credit history report. Having to many "hits" on your credit report does actually lower your score (as it looks like you are apply for a lot of credit in many places) so if you apply for many credit cards over a short period of time it will have an impact.

Second, one component of your credit score also looks at how much available credit you have. This has less to do with the number of credit cards than the total credit limit of all of your available credit (including line of credits, CC's etc). If a lender feels you have to much available credit given your credit history, income etc that also will have a negative impact.

Personally I would attempt to have as few as possible. Get rid of as many department store cards as possible and there really is no need to have more than one of any type of card (ie 2 different mastercards). It is often simpler to try and increase the limit on a few cards and get rids of other lesser used ones.

Exactly correct! The credit score will be reduced by the number or credit bureau "hits" form each of the companies , the total amount of "available" credit, and the biggee will eventually be total "utilized" credit.

Stick to 2 cards. One for everyday use..should be your favourite "points" or "bonuses" card. The second should be for emergency/backup only...Utilize it a few times per year to keep it active.

Eventhough I work for a major bank, my main card is the Canadian Tire M/C..I don't think it can be beat by other points/airmiles or even cash back cards (unless you charge over 10,000 per year on your cashback card and get the maximum cashback!

But then I even fill my autos at CTC and I like shopping at CTC.