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Credit cards

The following is the opinion of the folks at Experian:

 

Should You Open Credit Cards to Improve Your Credit Utilization Rate?

 

You can manage your credit utilization ratio in several ways, including:

 

  • Paying credit card balances in full every month. Remember that even if you're not able to get completely 'back to zero' each month, keeping your balances as low as possible is still helping you move the right direction and avoid racking up excessive debt.
  • Keeping open credit accounts that have zero balances, even if you don't intend to use them.
  • Requesting a credit limit increase from a credit card issuer.
  • Opening new credit accounts.

This last option, however, has the potential to negatively affect your score in the short term. Credit scoring models also consider the number of times new creditors — such as a new credit card company — have looked at your credit report within a certain time frame. Too many inquiries in a short period of time can influence your credit scores. In addition, having too many credit cards compared to your overall credit mix may also be a risk factor and could negatively impact your credit scores. You know yourself best, and if having open cards with high limits could prove too tempting for you to overspend, carefully consider the right number of accounts for you based on your personal strengths and financial abilities.