Credit cards are a good method of building credit. As long as you practice responsible spending habits and make all of your payments on time, carrying three credit cards will not damage your credit score.
Facts
Possessing three credit cards does not hurt your credit score, although your score may rise or fall depending on the amount you charge on your credit cards and how recently you opened each account. The older a credit card is, the more beneficial it will be to your credit rating.
Significance
The size of your balances and the amount of your spending limits are used by the credit bureaus to calculate your debt to income ratio, which is 30 percent of your credit score. A high debt to income ratio can lower your credit score.
Considerations
Having an installment account, such as a home loan, appear on your credit report along with your credit card accounts will balance out the types of debt you owe and boost your score.
Misconceptions
While having three credit cards does not damage your score in itself, when you apply for the cards your credit rating will temporarily drop. This is because each time you apply for credit a credit inquiry appears on your credit report. A credit inquiry will drop your score by five to seven points for approximately 60 days.
Warning
If you do not make your payments on time to your creditors, having three credit cards can severely damage your score. This is because you will be receiving three late payment notations on your credit report each month instead of just one.
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