Will I Build Credit Faster With Multiple Credit Cards? – Credit Card Insider


Hi, my name is John Ulzheimer and I’m a
credit expert who contributes to
CreditCardInsider.com. If you have any
questions for us please submit them in
the comments section below. Today’s
question has to do with building credit
using credit cards and secured cards, or
secured cards. And the question is this:
Am I going to build credit faster by having
two credit cards or am I going to build
credit faster by having two secured cards? Is that better than
having just one or neither?
And the answer to the question is this: Building credit, the speed at which you build credit
is not accelerated because you
have five cards versus one card or two cards
versus one card. It’s also not accelerated
whether you have a credit card
versus a secured card. The rate at which
you build credit is essentially in line
with the age of the accounts on your
credit report. So if you have one account
that is 10 years old, that means you have a 10 year old credit report. If you have
two accounts that are two years old,
it means on average you have a two-year-old credit report. And by consistently adding
new credit cards or secured card to the
report, you’re actually going to make that
average age of your accounts lower and
lower each time you do so because you’re
adding something that’s brand new to the
credit report that’s weighing down the
average age versus actually helping the
average age. So the speed at which you’re
going to build credit really is not
relevant to the number of the accounts
on report, it’s the age of the accounts on
the report. There is one thing, however,
to keep in mind: you will actually do better in your credit scores if you’re able to
have a nice diverse set of accounts on the report: credit cards, installment loans,
other types of revolving accounts. You’re actually going to do better if you have a
mortgage, believe it or not.
Credit scoring models will reward you
for being able to manage a mortgage
loan because it’s such a large
obligation. It’s very atypical relative to
something a credit card or a retail
store card or even a petroleum card, which are
very easy to manage those because the balances are usually fairly low, but you’re actually going to build a
credit score faster by actually having a nice diverse set of accounts.
So think about that. The age of the
credit report, which is around 15 percent
of the points you score, the diversity of
the items on the report, which is about
10 percent of the points in your score, those two categories together are worth
roughly 1/4 of the points in your score. We haven’t talked at all about
whether you’re paying them on time, how
much debt you’re in on those particular
accounts… We’re just talking about how old they are and whether or not you have
them. So building a good credit score and a good credit report is not all about,
or only about, paying bills on time and
staying out of debt.
It’s tackling strategically some of the
secondary characteristics or metrics
within the scoring model and one of
those is how old is the report and the
other is diversity. So certainly I would
not go out and apply for a car loan just
to get one on your credit report. Apply
for a car loan if you wanna buy a car.
I certainly would not go out and buy a
home just to get a mortgage on your credit report
buy a home because you really do want to buy a home. As these things start to hit your
credit report over time organically just
because that’s how it’s going to evolve,
your scores are going to improve if for
nothing other that now you’ve checked some
more boxes on the report regarding the
age of the information and also the
diversity of the information, as well. So if you have any other questions
pertaining to credit or financial topics,
then please submit them to CreditCardInsider.com
or in the comments section below. Thanks for watching and have a nice day.

51 thoughts on “Will I Build Credit Faster With Multiple Credit Cards? – Credit Card Insider

  1. Happy Monday! I always look forward to the next CCI video. On the topic of diversity, John mentioned petroleum (gas) cards. Would a gas card add more diversity to my credit report, on top of the credit cards and loans I ready have? Or does it count as just another credit card?

  2. Know what I'd love to hear? John debating with Dave Ramsey, who's so anti credit card. He probably won't do it, but it sure would be fun to listen! I'm certain John could humiliate him lol

  3. How beneficial to your credit, is being an authorized user on someone else's credit card?

  4. I have 3 credit cards opened around the same time. 2 have yearly fees 1 doesn't. can i close the 2 with fees and keep the one without and not affect my age of credit? How much of an impact with lowering the credit to debt ratio should i expect?

  5. Yes, you can build credit much faster with multiple credit cards. Here is the reason. Age accounts for only 15% of your score. By having multiple credit cards with low utilization(30%), payed on time(35%), you can see why the age doesn't make or break your Fico. Plus, as time goes on, these multiple accounts will triple its effectiveness. At first your score will probrably take a hit because of new credit cards but thats ok.

  6. I am using nothing in good health and paid all in full every month on time with no late payments and delays . Perfect in all shapes

    Due to which I am getting discover pre-approval every second week,
    But I didn't applied yet as I was waiting for SSN
    Now I have got my SSN, and I am going to add it in banks in day or so,

    Now I am looking to buy a car and few more application on multiple credit card, should wait few months of apply cards right away after adding SSN ? Plz help the answers best for me .?

  7. But I have few questions
    I got cards on basis of my ITIN, as I didn't had an SSN till today .

    I got my first card from boa

    1. I want to know one thing I am using a boa secured card which was issue to me with $500 limit with a deposit of $99 one year ago, but now it's raised to $2000 and refunded me the deposit and it's a unsecured regual card now.

    After 6 months with pre-approved inviting

    2. I have one capital one un secured card also was offered to me like 5 months ago by pre-approved invitiation, with $500 limit no security deposit. And Was approved

  8. The detailed experience and knowledge in this article is great and up to date full information explaining how credit system works.. Was a great help.

  9. excellent i love the web site and youtube channel, i have learned a lot, by reading and watching all the videos, i have learned almost all from these videos from zero to now, and after watching them i tried to consider what was told to do, i did and i raised my limit of both cards
    one from $500 to $1500
    second $ 1000 to $ 2000
    and not only this, they responded to all my questions and help me to understand much more than before,
    even now i had helped my friends and family to learn more and they all were also benefited from the same.
    PLZ NOTE :- this for the people who watch this video and read the articles, i am just a person who read and watched and i am sharing my experiences, so the way i got help how to learn and make my credit good you all should get the same, i am not working or getting paid for this. but yes i also like to help ppl by sharing my side.

  10. How long should you wait after you applied for a credit card and got accepted to apply for another one?

  11. Hi I have 7 Credit Cards All Unsecured So Please Tell Me Is it okay All are 1 year Old and Im A Student of age 19

  12. I have a question my oldest credit card account is two years and a half old. I just applied for two more credit cards and got approved with that affect my credit in a bad way

  13. Why can't I pay off my remaining car note with a credit card.
    My car note does nothing for my credit score number
    Should I do a cash advance

  14. my name is carlos my age is 53, and this is my story, first of allow me to express that I appreciate the valuable information that you are so kind to shier with all of us thank you for this. as of right now my (Equifax) scoring 719. (Trans Union) scoring 727. (Experian) scoring 753. I purchase (2) tradeline, (1) $25,K credit limit. 10'yrs history. (2) $20,K credit limit. 4'yrs history. The truth of the matter is I'm in the market to purchase or lease a new Cadillac. I do understand that this will be my very first time that I will purchase a new vehicle from a dealership. Would it be fair to say, would I have a positive impact in regards of these trade lines that I purchase to accomplish my gold to inquire the car? the trade lines will hit in the end of march 2017 my E-Mail: [email protected] / (323) 354-8009 Thank you..

  15. But don't you have a better chance of your credit limit being raised with more cards? For example if you have 7 cards with a 500$ limit after 6 months with no late payments there's a chance that several of those will give you an automatic credit limit increase vs having just 2 cards paid on time for 6 months and hoping to get an increase on one or both?

  16. Thank you for this video. My question is if I want to get a home loan in 5 years and I only have 1 credit card… isn't it a good idea to get a couple more credit cards and risk the age?

    What's a good list to access to find out how to diversify credit?

    Thank you.

  17. I wanna open a secure credit card but I don't know which one better the td bank or well fargo one.

  18. Last question! Hand to god. lol. Would it be okay to just always leave your card balance at 1% utilization? That way when the closing day comes you're at a good range? And then just keep up with your due date?

    I'm trying to get a system locked in for a good score. It kind of seems like if I pay my card down to 1% after a purchase posts ($27) I'll hit my minimum payment easily and check back just in case.

    Is this wrong?

  19. I've had a question for awhile now. Is it better to max out secured credit cards and then pay them off in full every month? or just keep the usage at under 30% and pay on time ?….I was told if I max out my card then pay it off in full every month I could raise my score fast. But I've also been told to not go over the 30% utilization mark.

  20. Hi John, thank you for the video! I do have a question. I basically have no credit but I have liquid assets that I developed for some time. For years I've been declined credit cards even secured cards. I finally get approved for my first credit card after almost 15 years worth of attempts. This card is actually unsecured from Bank America. This is a blessing and opportunity to not only get a credit score but improve it to a considerable score. What is the best way to use the card to develop the best score?. I've been getting conflicting suggestions. Someone said use all the credit line on a purchase and pay the minimum balance on the billing statement til paid off then I talked to someone else and they told me I should make a purchase, any type of purchase and pay the full amount of the balance on the next billing statement and before the due date , almost like using like a debit card. Any ideas? Also my credit union has an offer for a secured loan with a $1000 minimum credit line. Is it a good idea to add this along with the bank of America credit card? I wanted to start them at the same time and diversify the type of credit lines I have and pay on and possibly help my score faster. I hope this makes sense,

  21. So let's say I'm 24, just opened a secured account with Arizona federal credit union. (500 limit). today may 30. if I open another account would it help since I dont have much age to begin with? and just establish both now Or should I just stick with one until.i can qualify for a unsecured account? THANKS IN ADVANCE

  22. But aren't you contradicting yourself in a way? If I get 2 credit cards around the same time, 3/4+ years later they BOTH help the average age of my credit and in result the avg age won't take as big of a hit if something new is added to the report. The avg age will take a hit initially but in the long run it seems beneficial. Also you will have a higher number of accounts open which also can help your credit score if you don't have that many open already, even though variety is probably better like you said the # of open accounts you have period does affect your score. Not trying to be a smart ass at all b/c this is a very informative video but it confuses me. Any insight on this would really be appreciated. Thanks.

  23. Hi John, Loved the video but have some questions.
    Question : Diversity of credit would be a car loan, a dept. store card or gas card, short term electronics loan?? How about school loans? Are those considered a type of credit loan now?
    Question: How much does my credit to debt ratio effect my credit? ?

  24. if I start out with a secured card and build enough credit to get a unsecured card should I keep both or should I keep the unsecured or is both beneficial to my credit

  25. Hi there quick question about utilization . I have two credit card one with 300 $ and the second with 1000$ limit .since they both have different closing date how is the utilization calculated ? Is it separately ?

  26. You went too far extreme we're not talking about going out buying cars and buying houses were talking about just applying for more credit on credit cards and it and keeping your utilization low you talk about a whole other animal

  27. Should or should I not increase my credit limit and or how would that be Beneficial in what scenario?

  28. if I get a bunch of new secured cards, that would iincrease my available credit, lowering my utilization. Since utilization is a bigger part of my score, could I expect an immediate increase in my score? What do you think of the credit score on credit karma?

  29. Good morning John hope all is well. here's a question, should I apply for another secured credit card, having a secured card already and with poor credit?

  30. Mortgage in canada is not calculated in credit scores

  31. If I product change a credit card with Bank of America,what will be the limit of my new credit card? Will it be the same limit($2400) before the product change?
    Thank you!

  32. Can i transfer 70% of my credit limit from Chase Saphire preffered to Freedom Unlimited? Is it possible?

  33. Hey
    Does chase 5/24 rule include closed accounts?
    I have 6 accounts in total in the last 24 months and 2 of them are closed but they were opened within 24 months
    Thank you!

  34. I recently opened a Fingerhut account. my credit was 683 . Once the account was posted on my credit bureaus my score dropped 56 points.can you tell me why

  35. Building credit you need at least 6 accounts 3 to start then 1 every 3 mounths ….I went from 540 to 701 in 6 mounths doing it like that FICO 701

  36. Thank You! Thank You! I have only 1 card that is only 3months old. My FICO is 731 on Experian and 709 on TransUnion. But, I have 3 hard pulls because I tried to open more accounts with such a thin file. I’m only leaning now that my short credit is working against me right now. At what point do U feel I can try again for a rewards type card ?

  37. If I pay off a loan early, would it negatively affect my credit since I would make less payments and therefore have less payment history?

  38. I signed up for a gym membership with no contract and I didn’t have to write down my social security number I canceled the membership they didn’t cancel it now they sent me an email saying they gonna send my account to a collection agancy, can they do that?

  39. Get as much credit cards as you can, use them, pay them full, build credit simple. dont listen to this guy lol

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