What Is The Best Number Of Credit Cards To Have In Your Wallet?

The most important credit score factors have been reviewed in previous DailyDollar articles

. By now, most people understand that payment history and amounts owed are the two biggest components that make up your credit score. The types of credit you have, number of inquiries and length of credit history make up the other key factors.

There are two popular ways to obtain your personal credit scores. First, you have the option to purchase them directly from the credit bureaus. Second, you may get access to your personal credit scores for free by trying a credit monitoring service which is available to all consumers. Credit monitoring services can be a life saver; you would not believe the amount of attempted theft taking place all over the world at this very moment and unless you have credit monitoring service, you may not find out what is going on with your credit until it is way too late.

The best advice that we can share about the optimum number of credit cards you should have is at least three, but no more than four credit cards. In addition, keep in mind that the longer you have these three credit cards (and actively use them) the better for your credit score. Having more than four cards isn't the end of the world,however. Look at the facts, here is what happens when you open a new credit card. You can expect a small drop in your credit score. That drop in your score will last for at least six months until some history of use on that new card and payment history can be tracked, recorded and reported out by the credit bureaus.

Some people out there have 15 or 20 credit cards, including store cards (like Target or Sears). If you want to begin the process of consolidating and eliminating some of your cards, here's what you do. To start off, make a list of your cards and the age of each account. Then, close out the youngest accounts first which do not have as much history attached to them. As your oldest accounts become 10 to 20 years old and you continue to demonstrate a pattern of monthly payments which are on time and you consistently use the cards while showing low utilization rates, you will be earning more points toward your overall personal credit score with each of the three reporting credit bureaus.

by: Nathan Randall

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