Does Opening Multiple Cards Hurt My Credit?

April 23rd, 2020

The short answer is “no.” It shouldn’t hurt your credit to collect credit card points. In fact, it’ll most likely help your credit score -- provided you do it the right way. Here are the facts:

Credit is based on these 6 factors.

Our strategy will positively impact 4 of those 6 factors. And the "negative" impacts of the other 2 on your credit score are generally outweighed by the positive impacts of the other 4.

• Credit Usage (High Impact)
  • As you get more cards, you’ll have a higher credit limit across cards. This will make your “percentage of credit used” drop. Dropping that percentage will greatly help your credit score.
• Payment History (High Impact)
  • You must turn on auto-pay on all your accounts to avoid any issues. A couple of common concerns are:
    • “I’m worried about reviewing the bill first.” Auto-pay still allows you to review and dispute any charge.
    • “I’m worried it’ll drain my bank account without me realizing it.” If this is a concern, you should consider our Am I Financially Ready » article. At the very least, you should put the minimum payment amount on auto, and manually update it to the full amount when you feel confident.
      
      
• Derogatory Marks (High Impact)
  • These items are based on bankruptcy, tax liens, and judgements. This hobby (if executed properly) will make you more aware of avoiding these issues. But if you've had recent issues with any of the above, this hobby is more than likely not for you.
    
    
• Credit Age or How Long You've had Credit (Medium Impact)
  • This factor might decrease a little as you open new cards. Instead of canceling older cards, we typically recommend downgrading. That's because downgrading your cards will still retain your age marker. The actual impact on scores we have experienced are negligible.
    
    
• Total Number of Accounts (Low Impact)
  • It seems counter intuitive, but more is better here. Having more cards demonstrates you have responsibly managed many credit situations.
    
    
• Hard Inquiries (Low Impact)
  • A "hard Inquiry" is the term for when a bank checks your credit history for the purpose of providing you credit.
  • There is a very small effect on your credit even for a large number of hard inquires. We’ve seen as little as 5-15 point drop for as many as 15 inquiries in 2 years (Still at 768).
    • The negative affect is outweighed by the better score you’ll have on the higher impact credit usage factor (opening more cards will help your credit score more than the hard inquiries will harm it).
  • On average, people in this hobby have 3-5 inquiries a year without any negative effect on their credit score.
  • Our tool allows you to minimize hard inquiries by avoiding unnecessary declined applications through our automated application rule notifications »
  • Of note: Some credit experts say you should hold off on these inquiries if you’re going to be getting a mortgage or other large loan in the next 9-12 months. We personally had no issue getting a mortgage, but we want to at least share the caution.

We recommend that all of our users apply for a free Credit Karma account to know where they stand on various credit score factors. Simply being aware of all of the factors and keeping an eye on them will have a positive affect on your score. In virtually every one of our writers’ cases, our credit scores have gone up as we have gotten more heavily involved in the hobby.

All of this, of course, assumes that you are fiscally responsible »