Credit accounts – how many should you have?

It’s often a question that comes up, and not many of us know the answer to. Credit accounts build the framework for any credit score. With little or no credit activity, you will struggle to obtain a credit score depending on the scoring model. Whether you have one account or ten, you may have wondered if there is a right or wrong answer to the number of accounts you should have open at any one time. This article provides some insights on this very topic – how the number of accounts you have open can affect your credit health.

How many accounts do you need?

The term “credit accounts” actually refers to any type of account which appears on your credit report. Some examples being: personal loans, credit cards, car loans or mortgages. The tricky thing is there isn’t a precise number of credit accounts that you should have in use to get an excellent or perfect credit score. The optimal number of active accounts depends on your personal situation or circumstances. If you are somebody that likes to spread out your balances, so you’re not hitting your credit limit on a certain account, having more than one credit card to use will give you more credit to utilise. Opening new credit cards could also earn you better reward deals, such as cashback and promotional rates that may be on offer. It really does depend on what works best for you.

The impact on your credit score

The three main factors that contribute to your credit risk and behavioural patterns are maintaining, opening and closing accounts. These actions play a bearing on a number of different factors to make up your credit score.

The above factors are by no means definitive reasons to open more accounts or not, but they are useful benchmarks to keep in mind. To add some further clarity, we’ve added some scenarios to paint a more realistic picture:

Scenario 1: You’ve decided that the time is right to start building a credit file. Fortunately, you’re successful in your application for a credit card and your account is now open. The question comes to mind; should you apply to other credit card providers in an attempt to accelerate your credit score and your total number of accounts? Probably not a good idea, building an excellent credit score will take time, so you should just stick with one card and open up a new account when the time is right. It’s crucial to make your repayments on time, more so than increasing your total number of accounts.

Scenario 2: You’re now an established credit user. You’ve proven the fact you can responsibly manage a credit card for several years. Now is the time where you feel it’s right to open up another card, and you could really do with the upside of new buying power and some of the additional perks that come with it. In this scenario, opening up a new card is advisable, because a new card would buffer your credit utilisation rate and increase your total number of accounts.

Scenario 3: You’re are on the brink of paying off your car loan – well done! Although you find yourself a little nervous as a result of this, due to the concern that your credit score may drop a little. Why would my credit score be impacted negatively by clearing a balance you ask…surely that’s a good thing? Your combined number of accounts, account variation and credit history lifespan might be impacted by paying off your loans momentarily. Does this mean you should hold off or reduce your repayments? Not quite. It’s advisable to look at exactly how much debt your carrying, assess the related interest charges and how these loans might restrict your spending ability.  Undeniably, having an excellent/good credit score is a valuable thing, but sometimes you need to weigh up what’s more important in the short term.

Legal information

Marketplace Finance Pty Ltd with ACN 608 607 227 and ACL 487316 is trading as Friendly Finance. Friendly Finance does not make finance or credit decisions and is not a provider. Friendly Finance helps customers find financial partners that meet their requirements.Financial partners may wish to obtain credit reports as part of the decision process. The line of credit available will vary depending on the financial provider. In order to help the government fight identity theft, the funding of terrorism and money laundering activities, providers may verify and record customer information. This website does not directly endorse a particular product and service.Any information on this website should be taken as opinion only.

Address: 903 level 9, 50 clarence st, sydney, nsw, 2000. Email:

Disclaimer: Cash Loans Paid In 60 Minutes*
* As advertised - is not a lender or broker and does not advise or recommend any lender. We simply provide options based on the information you provide.
Once you are approved by an actual lender, your loan may be transferred straight into your bank account within 60 minutes of signing the contract during standard banking hours.
The same transfer times could apply on second and subsequent approved loans.
For loan amounts over $3,000 it usualy takes longer than 60 minutes

WARNING: Do you really need a loan today?*

It can be expensive to borrow small amounts of money and borrowing may not solve your money problems.

Check your options before you borrow:

The Australian Government's MoneySmart website shows you how small amount loans work and suggests other options that may help you.*This statement is an Australian Government requirement under the National Consumer Credit Protection Act 2009.