Will Opening a Lot of Credit Cards Ruin my Credit Score?
This is the most common concern when opening credit cards to leverage points for free travel, but surprisingly the answer is no. In fact it can boost your score, mine went up! Learn the strategies we use to ensure your score goes up, not down.

In the complex landscape of personal finance, understanding the nuances of credit scores is crucial for financial health and empowerment. This comprehensive guide delves into the significance of credit scores, their calculation, real-life implications, and strategic tips for maintaining a robust credit profile.
Why Do Credit Scores Matter?
Credit scores are more than just numbers; they are a reflection of your financial reliability and discipline. These scores are pivotal in a lender’s decision-making process, influencing the approval of loans, credit cards, and even determining interest rates and credit limits.
Beyond borrowing, credit scores can affect rental applications, insurance premiums, and in some cases, employment opportunities. In essence, a strong credit score opens doors to financial opportunities and savings, while a poor score can limit your options and cost you more in the long run.
The highest number a credit score can be is 850. The lower your score the more riskier lenders see you because there is a greater chance you might not pay it back. A lower score will make it harder to getting approved for loans, credit cards etc.
If you have a high score lenders are more willing to loan you money because they have confidence you will meet loan repayment obligations.
Credit Score Ranges | Rating | Description |
<580 | Poor | This credit score is well below the average score of U.S. consumers and demonstrates to lenders that the borrower may be a risk. |
580-669 | Fair | This credit score is below the average score of U.S. consumers, though many lenders will approve loans with this score. |
670-739 | Good | This credit score is near or slightly above the average of U.S. consumers and most lenders consider this a good score. |
740-799 | Very Good | This credit score is above the average of U.S. consumers and demonstrates to lenders that the borrower is very dependable. |
800+ | Exceptional | This credit score is well above the average score of U.S. consumers and clearly demonstrates to lenders that the borrower is an exceptionally low risk. |
Credit cards are a type of loan because when you put spending on them you are borrowing money from the bank until you pay it back. Banks need to have the confidence you will pay it back in order to approve you for a credit card, so they run a check on your credit before they approve you for each card.
How Credit Scores Are Calculated
Credit scores are derived from your credit reports, which are detailed records of your credit history maintained by major credit bureaus. The most common model, the FICO score, is calculated through five key components:
- Payment History (35%): Timeliness of your credit payments.
- Credit Utilization (30%): The ratio of your credit card balances to their limits.
- Length of Credit History (15%): The age of your oldest and newest accounts and the average age of all accounts.
- Credit Mix (10%): The diversity of your credit accounts, including credit cards, loans, and mortgages.
- New Credit (10%): The frequency of credit inquiries and new account openings.
Understanding these components can help you focus your efforts on the areas that will most significantly impact your score.
Payment History (35%)
Payment history is the most critical factor in your credit score calculation, accounting for 35% of your FICO score. This component reflects the consistency and timeliness of your credit payments, including credit cards, loans, and other credit accounts.
Lenders use this information to gauge your reliability in repaying borrowed money. Late payments, defaults, bankruptcies, and other negative marks can significantly harm your credit score. To maintain a good payment history, ensure that you pay at least the minimum due on all your accounts before their due dates.
Credit Utilization (30%)
Credit utilization refers to the ratio of your current revolving credit balances (primarily credit card balances) to your total available revolving credit limits. This ratio accounts for 30% of your credit score and is a key indicator of how you manage your credit.
High utilization can signal to lenders that you’re over-reliant on credit or may be at risk of overextending yourself, which can negatively impact your score. It’s generally recommended to keep your credit utilization below 30% on each card and across all cards to maintain a healthy credit score.
Length of Credit History (15%)
The length of your credit history contributes 15% to your credit score and is determined by several factors, including the age of your oldest account, the age of your newest account, and the average age of all your accounts.
This component reflects the depth of your credit experience, with a longer credit history generally seen as favorable because it provides more data on your long-term financial behavior. Keeping older accounts open, even if you’re not using them frequently, can help lengthen your credit history and potentially boost your score.
This is why we tell you not to ever close your oldest credit card. This card is so valuable when it comes to your credit history!
Credit Mix (10%)
Credit mix accounts for 10% of your credit score and refers to the variety of credit accounts you have, including credit cards, installment loans, mortgages, and auto loans, among others.
A diverse mix of credit types can be beneficial because it demonstrates your ability to manage different kinds of credit responsibly. However, it’s not advisable to open new accounts you don’t need just to improve your credit mix, as this can lead to unnecessary inquiries and debt.
New Credit (10%)
New credit, which includes the number of new accounts you’ve opened and the number of hard inquiries made by lenders when you apply for credit, makes up 10% of your credit score. Opening several new credit accounts in a short period can be seen as risky by lenders, as it may indicate financial distress or a higher risk of default.
Each hard inquiry can slightly lower your credit score, though the impact diminishes over time. To minimize the effect on your score, limit the frequency of credit applications and only apply for new credit when necessary.
This is why we recommend waiting at least 30 days before applying for a new card, but the ideal time is 90+ days. Having a player 2 involved will help rotate who opens new cards so your credit score has time to recover after each new credit card.
Understanding these components can help you make informed decisions about managing your credit and maintaining or improving your credit score.
Tips to Keep Your Score High
Maintaining a high credit score is achievable with disciplined financial habits:
- Pay on Time: Always pay your bills on time, as payment history is the most significant factor in your credit score.
- Keep Balances Low: Aim to use less than 30% of your available credit to keep your utilization ratio low.
- Hold onto Old Accounts: The age of your credit accounts contributes to your score, so consider keeping older accounts open. Do not cancel these credit card accounts. If you want to cancel a card with an annual fee instead ask if you can downgrade it to another card in that family that has no annual fee to keep your credit history.
- Open Business Cards: These cards generally don’t report to your personal credit report as open accounts, so they won’t affect your length of credit history at all.
- Be Strategic About New Credit: Only apply for new credit when necessary, as each application can cause a small, temporary dip in your score. After you apply for a new credit card you will probably see a sight downward trend with your credit.
- Diversify Your Credit: A mix of credit types can positively affect your score, but only open new accounts if it makes financial sense.
How to Check Your Credit Report
Regularly monitoring your credit report is essential for understanding your credit health and ensuring accuracy.
Credit Karma will give you access to your credit report for TransUnion and Equifax and an estimated credit score, but it tends to be slightly inflated from what the bank uses. Sign up for a free account on CreditKarma.com.
To check your Experian Credit simply sign up for an account on Experian.com. This is free, do not sign up for the extras.
Reviewing your credit report can help you catch errors or fraudulent activities early, allowing you to dispute inaccuracies and protect your credit score.
By understanding the importance of credit scores, how they are calculated, and how to maintain a strong credit profile, you can navigate the financial landscape more confidently and secure a healthier financial future.
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