I have heard that it hurts your credit to have too many credit cards. I know that cancelling your oldest credit card is a bad idea, but aside from that, when is it good to have credit and when is it too much of a good thing?

Let's be clear here: these rules make no sense. They are stupid and illogical. I don't agree with them, but that's ok. If you understand them, you know how to game the system.

1. If you have no credit cards, you basically have no credit. This will hurt you.

2. If you have a credit card, use it frequently, and always pay your balance off, you have good credit (it takes time to build this).

3. If you carry multiple cards, use them all in a distributed fashion, and always pay them off on time, you will have good credit.

4. If you get out of control and carry balances on one or more cards, you are playing with fire, but you won't hurt your credit score if you pay your minimum payments each month.

5. As soon as you can't pay minimum payments on one or more cards, you have begun to hurt your credit.

Rules of thumb: carry a reasonable number of cards (I have two, I might get another someday). Always pay off the balance in full every month. Use a credit card because you can, not because you have to. It's a tool, not a magical goodie creator.

Most important rule: more often than not, closing a credit card account with hurt your credit. But remember, keeping it open most likely costs you nothing (barring cards with annual fees), and so long as you use each card you have once every six months (even for a candy bar), the credit card company won't get mad at you, and they won't penalize you or hurt your credit.

There is no hard stop for a number of credit cards that is "bad" for your credit. The simple fact is that the more credit cards you have, the more likely you are to miss a payment and hurt your credit.

Installment debt such as mortgages, auto loans, & student loans are reported to all three major credit bureaus. This will establish a credit file for the debtor & calculate a score.

Oh, I'm sure I have a credit score

I now use credit cards for points/rewards/rebate don't carry a balance on any of my major credit cards. And while I no longer have a car note or student loan, but I will be paying on my mortgages for at least the next 15-20 years.

I'd like to make ensure my credits the best it can be so that I can try to refinance mortgage debt into a lower rate an shorter term loan.

I am speaking of the few store cards I've gotten for large purchases at promotional rates (for instance, whole house carpet at 0% interest and paid off in full before the promo period ended, for instance) that I don't see myself using in the foreseeable future. I know they count as open credit lines.

I found the following advice on creditkarma.com

http://www.creditkarma.com/article/ClosingOldAccount



I am wondering what effect will be of closing out a bunch of unused accounts and what kind of "negative suspicion" potential creditors may see. Anyone have any ideas?