By Manuel Tovar, September 27 – Hispanic Solutions Group
Should you have multiple credit cards to build credit? today we answer this interesting question
Everyone is always wondering if having a credit card can help you improve your credit score over time as you make timely payments and manage the amount of credit you are using. So you may be wondering if you should have multiple credit cards to build credit. And we always at the service of the consumer, we give them the following guiding information, so that they can make important decisions but do not forget:
Whether you have two credit cards or five, the impact they will have on your credit score will depend on how responsibly you use your cards. Let’s dive into how having multiple credit cards can help or hurt your credit score. Today we tell you how many cards you should have and we give you some tips to build your credit.
And Also How Multiple Credit Cards Can Help Your Credit Score
Today we show you how having multiple credit cards can help you build credit:
1. Credit utilization rate
Your credit utilization ratio, or the percentage of available credit that you are using, is one of the most important factors that make up your credit score. Having a low credit utilization rate can have a positive impact on your score because it shows that you are not using too much of your credit. Then you should try to keep your credit utilization ratio below 30%, as using more than that will lower your credit score.
Having multiple credit cards can increase your credit limit, which can lower your credit utilization rate. If you have a credit card with a spending limit of $ 1,000 and you spend $ 300 per month, for example, your credit utilization rate is 30%. If you get a second credit card with a $ 1,000 credit limit and continue to spend $ 300 per month on both cards combined, your utilization will decrease to 15%. So the lower your credit utilization ratio, the better the impact on your credit score.
2. Positive payment history
Your payment history, which includes any timely, late, or missed payments on your credit accounts, is the single most important factor in your credit score. Your positive payment history stays on your credit report for 10 years, so paying your bills on time is a great way to build credit. If you have multiple credit cards, making timely payments on all of them can help improve your credit score.
How can multiple credit cards hurt your credit score?
If having multiple credit cards can help you build credit, there are also a few ways it can affect your credit score, for example:
1. Length of credit history
The average age of your credit history is another factor that affects your credit score, and a longer credit history helps you build credit. Getting multiple new credit cards will lower the average age of your credit history, which can lower your credit score. So be sure to only apply for the credit cards you need, and try not to open too many new cards.
2. Difficult queries
Every time you apply for a new credit card, the issuer will conduct a thorough investigation of your credit history to decide whether to approve it. Difficult inquiries will show up on your credit report and can lower your score temporarily, especially if you apply for multiple credit cards at once. This is another reason why you should try to limit the number of new credit card accounts you open, especially in a short period of time.
3. Negative payment history
Getting more credit cards increases the number of bills you have to pay each month, which can be difficult to control. Also, having more credit cards can make it tempting to overspend, as you’ll have more credit available. Both of these problems can lead to late payments, which will affect your credit score. Before applying for new credit cards, make sure you can pay off balances in full and on time.
If you have any questions related to finances, credits and other related topics, but do not know who to turn to, contact us by going to Hispanic Solutions Group, writing to email@example.com, by calling 612-216-1599 or accessing financial information on YouTube, The credit channel, Our specialists in charge of Ms. Jessica Aliaga will be informing you of any concerns about this and other financial issues of general interest and guidance as in this topic, today we are giving you the following report so that you can make your economic decisions more important, he alsoWe invite you to follow our social networks: LinkendIn, Facebook, Twitter and Instagram