How Credit Cards Affect your Credit Score. Having a credit card is like having an employment. You need to be punctual, imbibe work ethics and do a whole lot of other things your employer demands to keep your job. If you have a credit card you have to charge only what you can afford and pay back the charges you’ve made, you also have to be careful  of the impact credit cards can have on your credit score. How you use your credit card can make or mar your credit score.

However, your credit score is based on the data on your credit report — (a record of your credit and loan accounts maintained by companies called credit bureaus). Each month, your credit card issuer  reports your credit card activity to one or more of the three major credit bureaus.  What do they report?  They report your credit card balance, credit card limit, payment history, account status, and date you opened the account and how consistent you have been with your monthly payments.How Credit Cards Affect your Credit Score

How Credit Cards Affect Your Credit Score ; Your Credit Score Starts From Having A Credit Card

How will your credit score be calculated when you do not even have a credit card?. This makes it a big deal for you to get approved for a mortgage, car loan, an apartment or even a job.

Moreover, when you have a quality experience with different types of credit accounts — credit cards as well as loans — is good for your credit score because mix of credit is 10% of your credit score.

How Credit Cards Affect Your Credit Score ; Your Credit Limit and Balance Information

Each credit card has a credit limit for borrowers.  This credit limit is the maximum amount of credit your credit card issuer has made available to you. It is not advisable at all to use up all the credit. Maxing out your credit card — using all your available credit — makes you a risky borrower and your credit score will be low based on it.

Furthermore, many financial institutions also report a “high balance” which is the highest balance ever charged on your credit card. Even when  you max out your credit card and pay it off, your credit report can still show that high balance. It’s best to keep your credit card balance below 30 percent of your credit limit so you don’t become an irresponsible borrower.

Your Monthly Credit Card Payments

Bigger payments usually reduce your balance faster and can help boost your credit score. The time frame of your credit card payments is one of the most important factors influencing your credit score. Timely payments increases your credit score while late payments reduces it. Late payments are reported to the credit bureaus after 30 days lateness. Late payments also attracts another exorbitant fee.

Credit Card Applications

It is pertinent to note that each time you apply for a card, a record of your application goes to your credit report. Your credit score doesn’t show if you will get an approval. Just applying can have a negative effect on your credit score. Lots of applications in a short amount of time can hurt your credit score. Please minimize the rate you apply for credit cards.

The Number of Credit Cards You Have

When you have plenty cards,  it shows you are a big spender.  Unfortunately, the companies who developed the credit score haven’t told us the exact number of credit cards that influences your credit score. The number likely varies from person to person. In January 2015, Time reported a man with 1,497 credit cards and a near perfect credit score. He only uses one of the credit cards, though.

Keeping Your Credit Cards for a Long Time

The longer you keep your credit cards open, the better it is for your credit score.  If you have a positive payment history with those credit cards, the better. Keep your oldest credit cards around.  Use them once in a while to help out your credit score.  But also make sure you check out the latest credit card deals from time to time. If you have a good credit score,  you can qualify for a credit card with better terms.  You can also get rewards than the one you’ve had before.

Most importantly,  keep them open and active, in good standing, and with low balances. This will do your credit score a lot of good.