- 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.