Is Too Much Credit Bad for Your Credit Score?

checking credit score

Ah, the credit score. That three-digit figure that helps determine whether you get access to the finer things in life — at least that’s what we’re told. While a high credit score can’t guarantee happiness, it can help you get and stay on solid financial footing. So how do you manage your finances so that your score reflects your good habits? 

As it turns out, little things make a difference, like how much credit you have and how often you apply for it. While too much credit in and of itself may not be bad for your credit score, a lot depends on how you use it. These tips can help you get you started to a higher score and more financial options for your future.  

Don’t File Too Many Applications at Once 

Shopping around for credit sounds like a good thing. And often, it is. By reviewing potential offers from different issuers, you can help find the best rates and terms. But putting in a formal application typically results in a credit inquiry, which reduces your score by a little bit.  

If you are on the search for a car loan or mortgage, get loan quotes within a two-week period so the inquiries are consolidated into one hard inquiry.  

Be Mindful of When You Open New Accounts 

Here’s where too much credit might be an issue. If you get too many new accounts in a short period of time, it can signal to lenders you are in financial distress. That will result in a dock to your credit score. So, just like with car loans and mortgages, it’s a good idea to space out credit card applications. When you get a new card, wait several months before applying for another one.  

Keep a Variety of Credit Accounts 

One thing lenders like to see is the effective use of different kinds of credit. A mortgage, loan, and credit card are all different types. Instead of getting a new credit card, you may want to consider a line of credit or personal loan.  

Of course, it’s never a good idea to bring on more credit than you can handle, even if it temporarily boosts your score.  

Watch Your Credit Utilization Ratio 

Once you have credit accounts, it’s important to use them — but not too much. Paying your balances down to zero every month is ideal. In addition, try to keep your balances no greater than about 30 percent of your total available credit.  

Credit card companies may want you to be maxed out, but that’s harder on you — and bad for your score.   

Pay Your Bills on Time 

Experts give one basic piece of advice when it comes to optimizing your credit score: pay your bills on time. Credit utilization and on-time payment rates account for 65 percent of the credit score formula. So if you do nothing else, watch those due dates and use as little of your available credit as possible. 

Discover Your Credit Options 

If you’re ready to take control of your credit, have a look at options provided by lenders at It may be easier than you think to find the right card.  

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