Credit Scores & Credit Monitoring What To Do About Bad Credit How Credit Cards Affect Your Credit Score By LaToya Irby LaToya Irby Facebook Twitter LaToya Irby is a credit expert who has been covering credit and debt management for The Balance for more than a dozen years. She's been quoted in USA Today, The Chicago Tribune, and the Associated Press, and her work has been cited in several books. learn about our editorial policies Updated on March 19, 2022 Reviewed by Cierra Murry Reviewed by Cierra Murry Cierra Murry is an expert in banking, credit cards, investing, loans, mortgages, and real estate. She is a banking consultant, loan signing agent, and arbitrator with more than 15 years of experience in financial analysis, underwriting, loan documentation, loan review, banking compliance, and credit risk management. learn about our financial review board Share Tweet Pin Email In This Article View All In This Article Not Having a Credit Card Affects Your Credit Score Your Credit Limit and Balance Information Your Monthly Credit Card Payments Credit Card Applications The Number of Credit Cards You Have Keeping Your Credit Cards for a Long Time Frequently Asked Questions (FAQs) Photo: Getty Images Having a credit card is more responsibility than you might realize. You have to be responsible enough to charge only what you can afford, pay back the charges you've made, plus you need to be mindful of how credit cards can impact your credit score. Everything you do with a credit card affects your credit score, from applying to a credit card to using one. Even not having a credit card can affect your credit score. Your credit score is calculated using the information on your credit report (a record of your credit and loan accounts) and indicates the likelihood that you'll pay back money loaned to you. Each month or so your credit card issuer (among a few other businesses) reports your account activity to one or more of the three major credit bureaus to be included in your credit report. That means your credit limit, credit card balance, payment history, account status, and date you opened the account will all influence your credit score. Learn more about that below. Not Having a Credit Card Affects Your Credit Score If you're one of many consumers who doesn't have a credit card, your credit score could be affected. That's if you have a credit score at all. Without open, active accounts on your credit report, you won't have a credit score. Not having a credit score makes it difficult to be approved for a mortgage, a car loan, or even an apartment. Credit cards are one of the easiest types of credit accounts to be approved for which makes them a good option for establishing and building a good credit history. If you manage your credit well, your credit score will reflect that. Note Having solid experience with different types of credit accounts—credit cards as well as loans—is good for your credit score because a mix of credit accounts for 10% of your credit score. Your Credit Limit and Balance Information Many credit cards have a preset credit limit, which is the maximum amount of credit your credit card issuer has made available to you. Using all your available credit makes you look like a risky borrower and your credit score will suffer because of it. Many credit card issuers also report a "high balance" which is the highest balance ever charged on your credit card. So, even if you max out your credit card and pay it off, your credit report can still show that high balance. It's best to keep your credit card balance below 30 percent of your credit limit so you don't look like an irresponsible borrower. Your Monthly Credit Card Payments Your last credit card payment amount is listed on your credit report, but it's not factored into your credit score. Even so, your payment amount can indirectly influence your credit score. Remember that your balance relative to your credit limit is included in your credit score. Larger payments reduce your balance faster and can help boost your credit score. The timeliness of your credit card payments is one of the most important factors influencing your credit score. On time credit card payments help boost your credit score while late payments will bring your credit score down. On most types of accounts, late payments aren't reported to the credit bureaus until they're 30 days late. You might have to pay a late fee if you're a few days late on your credit card payment, but your credit score should be safe as long as you pay before you're 30 days past due. Credit Card Applications Each time you apply for a credit card, a record of your application goes onto your credit report. Your credit score doesn't factor in whether you're approved for the credit card or not, but making the application can have a negative effect on your credit score. Putting in several applications in a short period of time can hurt your credit score. For that reason, it's best to keep your credit card applications to a minimum. The Number of Credit Cards You Have Having too many credit cards can hurt your credit score. Unfortunately, the companies who developed the credit score haven't told us the exact number of credit cards that influences your credit score. The number likely varies from person to person. Note In 2016, Walter Cavanagh of Santa Clara, Calif. earned the Guinness World Record title of “Mr. Plastic Fantastic” with 1,497 credit cards and a near perfect credit score. He reportedly only used one of the credit cards. In 2019, Zheng Xiangchen of Shenzhen, Guangdong, China, surpassed that record with a collection of 1,562 cards. Keeping Your Credit Cards for a Long Time The longer you've had your credit cards open, the better it is for your credit score, especially if you have a positive payment history with those credit cards. Keep your oldest credit cards around, and use them periodically to help out your credit score, but also make sure you check out the latest credit card deals from time to time. If you have a good credit score, there's a chance you can qualify for a credit card with better terms and rewards than the one you've had since you were a young adult. The key to making sure your credit cards don't hurt your credit score is to keep them open and active, in good standing, and with low balances. Frequently Asked Questions (FAQs) How harmful is it to close a credit card account? Closing your credit card will hurt two categories of your credit score: your average age of credit and your credit utilization ratio. The level of impact on your credit score depends on how many other credit cards you have. If you have many more credit cards, closing one won't have as much of an effect as it would if you only have one other credit card. How long does it take to raise your credit score after getting a new card? Building credit takes patience and persistence, so you shouldn't expect immediate benefits after getting a new credit card. However, as soon as your credit card company starts reporting to credit bureaus, it'll start impacting your report. Credit card companies typically report information at least once a month, so you can expect to see your credit utilization ratio drop and your on-time payments increase after a month or two. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. Experian. "How Often Is a Credit Report Updated?" Experian. "Credit Score Can’t Be Calculated." Consumer Financial Protection Bureau. "Who Are the Credit Invisible?" Experian. "What Is a Credit Utilization Rate?" First General Bank. "How to Read Your Credit Report," Page 1. Consumer Financial Protection Bureau. "Credit Score Myths That Might Be Holding You Back From Improving Your Credit." National Credit Union Administration. "Credit Card Payments." FICO. "Payment History." Equifax. "When Does a Late Credit Card Payment Show up on Credit Reports?" Consumer Financial Protection Bureau. "What's a Credit Inquiry?" Experian. "What Is a Hard Inquiry and How Does It Affect Credit?" Federal Trade Commission. "Credit Scores." Time. "This Man Has 1,497 Credit Cards and Near-Perfect Credit Score." Guinness World Records. "Largest Collection of Valid Credit Cards." FICO. "The Importance of Credit History Length." Experian. "750 Credit Score: Is it Good or Bad?"