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How Do Credit Cards Affect My Credit Score?

Your credit cards make up a huge part of your credit score, so we like to take a look at your “credit card score,”  which is a traditional letter grade that we created to reflect how effectively you are using credit cards to boost your credit score. Though the credit-scoring bureaus consider more than just your credit card use, your credit card score is a good indication of your overall credit score. An “A” credit card score likely translates to a high credit score (720 or above), so long as you have a healthy mix of credit, pay your bills on time, and review your credit report for errors.

Your credit card score considers some of the same factors that your credit score considers, in terms of what makes up a credit score. Factors like …

Your payment history. A full 35 percent of your score is determined by your payment history, including whether you paid your credit card bills on time.

Another 30 percent of your credit score is comprised of outstanding debt, which includes the amount of debt you have on each of your credit cards as compared to your limit.

The age of your credit accounts makes up 15 percent of your score. Like a fine bottle of wine, the older your credit cards, the better.

The type of credit you have makes up about 10 percent of your credit. Ideally, you should have three to five credit cards.

And the final 10 percent of your credit score is determined by credit inquiries. As always, credit cards are a big part this. The more credit cards you apply for or open, the more your score will be hurt, though inquiries only affect your credit for about a year.

Remember that your credit score is the three-digit number that lenders will consider when determining whether to give you a loan and how to assign an interest rate to that loan. Though your credit card score indicates whether you have healthy credit card habits, it should not be relied upon as an accurate means of gauging whether you will receive the best interest rates. Instead, take the credit card score quiz and read the related articles as tools to help you learn how to adopt strong credit-building habits and build your credit score.