I thought more accounts was better! WRONG!
- Having too many open accounts can make it very hard to make quick, significant improvements to your credit score.
- Too many open accounts dilutes your credit report.
- A common cause of this is having multiple unconsolidated student loans.
- People with lower credit scores looking for new ways to increase their score make the mistake of opening multiple credit builder accounts — this actually causes their score to go down further, because they are opening multiple new accounts at the same time.
- Another common issue is people getting store-based credit cards you can only use at that store — think Home Depot, Kohl's, Target, Big Lots, Furniture Row, etc.
- Most people think that having more open accounts on their credit report is a good thing — this is a myth.
- Would a mortgage lender want to see 10 open credit cards with $100k available credit and a $10,000 balance? No — because this is a risk; you could go to Vegas to celebrate buying a home and go into huge card debt from gambling losses.
Do You Have Too Many Open Accounts?
- Ideally you would have 3–5 open accounts on your credit report that you've had for 5 years on average.
How to Resolve This Issue
- Student loans are the MOST common culprit for having too many open accounts.
- Learn with our Student Loan Consolidation Guide.
- Close those store credit cards that you don't really need — Home Depot, Kohl's, Target, Big Lots, Furniture Row, etc.
- Close any newly opened credit builder-type accounts — this will help your credit age go back higher.
- Remember the quickest way to raise your credit score fast: simply get your rent payments added to your credit report with a rent reporting service that reports your past rental history.