How Many Credit Cards Should I Have To Build Credit?

There’s no magic number or one-size-fits-all method for achieving the perfect credit score. Everyone has unique circumstances and reasons for applying for credit cards. When building your credit history, it’s important to understand that any benefit achieved with the card ultimately depends on you.

If you’re wondering how many credit cards you need to build your credit, keep reading to discover how your spending habits and inquiries can influence your score.

The Thin Line Between Too Many and Not Enough

Finding the balance between too many and not enough credit cards is key to perfecting your credit score. We know you’re probably thinking, “How many credit cards should I have to build my credit?”

You should aim to have five accounts to start. These credit accounts can be a mix of loans and credit cards. The goal is to build your credit history to more than five with a satisfactory payback rate.

Your credit will be considered too thin if you have less than four accounts on file. Lenders will think it’s risky to lend to you since you don’t have enough borrowing history. This will also make it harder for scoring models to give you an accurate credit score.

Hard Credit Inquiries

Wait! Before you consider applying to a handful of credit cards, it’s important to understand what hard inquiries are and how they can affect your credit score. Hard inquiries, also known as hard pulls, occur when a financial institution checks your credit history.

These inquiries can affect your credit score by a few points. They typically stay on your report for two years, and multiple hard inquiries at one time could alert lenders and credit card issuers.

What Is the Ideal Number of Credit Cards?

Your spending habits and budget skills will determine how many credit cards you should have. While having a mix of five or more accounts on file is ideal for lenders to see, that may not be suitable for you. The goal is to build your credit portfolio over time. This will allow you to use credit more wisely as your priorities change.

The Potential Benefits of Having Multiple Credit Cards

There are many benefits of having multiple credit cards and accounts. One of the main reasons why people open numerous cards is to boost their credit scores. Making your payments on time on various accounts will increase your creditworthiness. Those with diverse credit portfolios are more likely to be granted more financial products. This may include access to higher credit amounts or maximum rewards.

Need extra funding but don’t meet the credit requirements? At Superior Financial, we have an online loan application for those who want to build their credit score. We offer solutions that are personalized to your individual needs. Contact us today to connect with our team to see how we can help!

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