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Does Having Multiple Credit Cards Hurt Your Credit Score? Mortgage Eligibility?

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by: No more debt !
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Date: Sat, 23 Aug 2014 Time: 4:55 PM

Does Having Multiple Credit Cards Hurt Your Credit Score? Mortgage Eligibility?


When someone has multiple credit cards, they do not have to worry about that hurting their credit score… technically. What does hurt your credit score is the way that you have used those credit cards. We have talked about how your credit score impacts your mortgage chances; so what impacts your credit score?

  1. The type of credit you use
  2. New credit
  3. The length of your credit history
  4. The amount of credit that you owe
  5. Your payment history—how have you handled that


It is good to have more than credit cards as your use of credit; if credit cards are the only form of credit that you use, then you could have a bad situation and credit score. Now, that does not mean that you should go and get yourself a loan; only get loans when you need them. For example, having a purchase mortgage to buy a home would be a good and necessary loan to have.


The way that having multiple credit cards can harm your credit score is if all the cards, or most of them, are pretty new. When you open multiple accounts in a small window of time, mortgage lenders see that and view you as a risky deal. This means that they'll offer you a high mortgage rate and you will possibly even have to get a non-traditional mortgage. Opening up several new accounts in a short amount of time will mean possibly lowering your account age and that hits your credit score as well (look at number 2 of things that impact your credit score).


If you have high credit balances when compared to your credit line, your score will definitely take a hit. If you use 20 percent or less of your available credit, then the formula that creates your credit score will shine upon you more favorably. Even if you are someone who pays off their entire balance on time each month, if you spend close to your limit, then the formula will not like that very much. However, this is where having multiple cards can help you since you can spread that debt out over the cards.


If you are considering getting a mortgage or refinancing, then consider paying off more of the credit cards; this can help you quickly improve your score and get yourself a better rate. Use TrueFi for your mortgage needs!

About the Author

We are mortgage brokers that specialize in refinance and purchase loans. We service CA, CO, & VA. We make the process easy so refinance or buy through us today!

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