Why You Need Three Credit Cards to Build a Strong Credit Score … and Which Type Works Best

By Philip Tirone

Each month, I hold question-and-answer calls for the students in 7 Steps to a 720 Credit Score, my free credit-education course. We spend most of our time talking about credit cards, how to use them, and why you need three credit cards to build a good credit score. 

The fact is, credit cards can be your downfall if you use them to rack up unnecessary charges and dig yourself into a financial hole. On the flip side, when used wisely, they can be the bridge between a poor credit score and a great credit score. 

In this article, then, we will look at what you need three credit cards to build credit, which credit cards to get, and which to avoid. Plus, we will talk about the dos and don’ts of responsible credit card management.

Frequently Asked Questions

1. Why do you need three credit cards to build credit?
2. Is three credit cards the minimum, or should I have more?
3. Can I build a good credit score with only one or two credit cards?
4. What types of credit cards should I have to build the best credit score?
5. What’s the difference between secured credit cards and traditional credit cards?
6. Do secured credit cards help raise a credit score?
7. What is an authorized user account, and how does it affect my credit?
8. How do I use my three credit cards without going into debt?
9. Do I need to carry a balance on my credit cards to build credit?
10. How much should I spend on each card if I want to improve my score?
11. What happens if I miss a payment on one of my credit cards?
12. How long will it take to see results from using three credit cards responsibly?

FAQ: Why do you need three credit cards to build credit? 

You will need three credit cards to build a strong credit score because this number will give the credit bureaus enough information to judge your habits without putting you at serious risk of overwhelming debt. In the words of Goldilocks, three is “just right.” It is large enough to give the bureaus plenty of data to work with, but small enough to stay manageable.

Credit-scoring bureaus need information so that they can assign a score to you. The bulk of your score consists of your payment history (35%) and your utilization (30%), which is the percentage of your limit that you are using. Having one or two cards isn’t enough for the credit-scoring bureaus to judge your ability to manage multiple bills. It will also make it harder to keep your utilization below 30%, which is the threshold you will want to stay under to build a strong score. 

For example, if you have one card with a $500 limit and spend $200, your utilization will be 40%. But if you have three cards with $500 limits each, you can spread that $200 across all three cards, bringing your utilization down to about 13%.

At the same time, paying three credit card bills is manageable. If you open six or seven credit cards, you will increase the risk of overspending and juggling too many due dates, which can quickly lead to missed payments and unnecessary debt.

Key takeaway: Three credit cards are enough to build a strong score without overwhelming you. Click the link to see which cards are currently approving our clients.

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FAQ: Is three credit cards the minimum, or should I have more?

Three is the recommended number of credit cards. It’s enough to create a strong file and get into the “good” or “excellent” ranges if you use them wisely. Having more than three will not necessarily harm your credit score, but you must keep your balances low and pay your bills on time. Otherwise, the credit-scoring bureaus will view you as someone who could become overwhelmed with debt. 

Key takeaway: You don’t need more than three credit cards to reach a 720 credit score. See our list of cards that are currently approving clients if you’re ready to get started.

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FAQ: Can I build a good credit score with only one or two credit cards?

You can build a good credit score with only one or two credit cards, but it will usually take longer.With only one or two cards, even a small balance can cause your utilization ratio to spike. Beyond that, one of two cards doesn’t give the credit-scoring bureaus as much information about your ability to manage multiple accounts.

Think of it like school. If you are a part-time student taking one class, it might be easy to get an A. But if you carry a full course load and still earn straight A’s, you are providing evidence that you are able to consistently perform well in school. The same goes for credit: When you show the credit bureaus that you can juggle multiple accounts, you prove your ability to manage credit wisely.

If you want to limit the number of credit cards you have, consider adding a credit rebuilder account to your credit profile. These act as installment accounts, which are accounts with fixed monthly payments that end on a set date. Credit-scoring bureaus want to see that you can manage both revolving accounts (like credit cards) and installment accounts (like car loans).

If you only have one or two cards, adding an installment account will balance your profile and help you move into the “good” or “excellent” ranges faster. If you don’t already have an installment account, you can open an installment account through the Credit Rebuilder Program. Your payments will be reported monthly to the credit bureaus, giving you the mix of credit you need to increase your credit score to 720.

Key takeaway: One or two cards can work, but only if you balance them with an installment account. A healthy mix of credit will keep you moving toward a strong score.

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FAQ: What types of credit cards should I have to build the best score?

You will need three credit cards to build a strong credit score using any combination of secured, traditional, or authorized user accounts. The one type of credit card you should avoid is retail store cards. While they do report to the credit bureaus, they usually come with high interest rates and very low limits. Because they are tied to one retailer, it can also be hard to keep them active in a way that helps your score.

Here’s how the different types of cards compare:

Type of Credit Card	How It Works	Best For	Benefits	Drawbacks	Counts Toward the Three?
Traditional (Unsecured)	Approval based on credit history and income, no deposit required	People with some credit history and strong credit score	Higher limits, rewards, widely accepted	Harder to qualify for if you have poor or no credit	Yes
Secured	Requires a refundable deposit (usually $200–$500), which becomes the credit limit	Beginners or those rebuilding credit	Easier approval, reports to bureaus, can “graduate” to unsecured	Deposit required, usually low limits at first	Yes
Authorized User	Added to another person’s account, their history reports on your credit file	Students, people with thin credit files	Immediate score boost if primary user has good history	Risk if primary user has high balances or late payments	Yes
Retail Store Card	Tied to a single store, often easier approval	People who shop at one retailer often	Reports to bureaus, easy approval	High interest, low limits, limited use	Not recommended

Key takeaway: Any combination of traditional, secured, or authorized user accounts works, but retail cards should be avoided. For a current list of cards that are actively approving our clients, visit our client-approved credit card list.

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FAQ: What’s the difference between secured credit cards and traditional credit cards?

A secured card requires a deposit, while a traditional card does not. With a secured card, you’ll put down a deposit (usually $200–$500), and that amount becomes your credit limit. A traditional credit card is unsecured, which means approval is based on your credit history and income, not a deposit.

Both types of cards report to the credit bureaus, and both can help you build or improve your credit score. Secured cards are designed for beginners or people rebuilding their credit who cannot qualify for a traditional card, or who qualify for traditional cards with very high interest rates and fees only.

Here’s a quick comparison:

Comparison	Secured Credit Card	Traditional Credit Card
Deposit Required	Yes, usually $200–$500 (refundable)	No deposit required
Approval Based On	Ability to pay deposit (credit history less important)	Credit history, income, and profile
Credit Limit	Equal to deposit	Based on creditworthiness (often higher limits correspond with a higher credit score)
Reports to Credit Bureaus	Yes	Yes
Best For	Beginners or those rebuilding credit	People with established credit history
Graduates?	Often converts to traditional after 6 to 12 months of on-time payments	Already traditional

Key takeaway: Both secured and traditional cards build credit, but if your only options for traditional cards come with steep fees and high interest, starting with a secured card will usually be the smarter long-term choice.

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FAQ: Do secured credit cards help raise a credit score?

Yes. A secured card reports to the credit bureaus just like a traditional card. As long as you keep your balance low and pay on time, your score improves. Keep in mind, though, that the deposit is not applied to your balance unless you default, in which case you will lose the deposit, and your credit score might drop. 

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FAQ: What is an authorized user account, and how does it affect my credit?

An authorized user is someone who has been added to another person’s credit card. If you are an authorized user, you are not responsible for making payments, but the card’s history (i.e., age, limits, balances, and payment record) will appear on your credit report.

If the primary cardholder has good habits, such as paying on time and keeping balances low, that positive history will strengthen your credit file. For example, if you are added to a parent’s card that has been open for 10 years with a perfect payment record, that history can help increase your score almost immediately.

On the other hand, if the account has high balances or late payments, those negatives will also show up on your report and can drag your score down. The good news is that if you remove yourself from an authorized user account that is in bad standing, the card’s history will usually disappear from your credit report within one or two reporting cycles. Without that negative history attached to your name, your score will often recover.

Authorized user accounts are especially helpful for students or people with thin credit files. They let you “borrow” credit history while you work on opening your own accounts.

That said, not all credit card issuers report authorized users to the credit bureaus. Be sure to ask before adding your name as an authorized user. 

Key takeaway: An authorized user account can boost your score quickly if the account is in good standing, but if it is not, you can remove yourself and stop the damage.

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FAQ: How do I use my three credit cards without going into debt?

The best strategy will be to put a small charge on each card every month, and then pay it off in full before the due date. Using credit cards is important because the credit bureaus want to see that you are actively using credit and managing it responsibly. A card that sits unused doesn’t help your score, even if it’s open. Regular small charges prove that you can handle credit and give the scoring models positive payment history to work with.

By paying the full balance, you will avoid debt and interest charges. Credit card companies only charge interest when you carry a balance past the due date. Using your cards this way lets you build a strong payment history and keep your utilization low, all without spending extra money on interest.

Key takeaway: Use each card for small, regular purchases so your accounts show activity, then pay the balances in full every month. This will build credit, protect your utilization ratio, and keep you from paying unnecessary interest.

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FAQ: Do I need to carry a balance on my credit cards to build credit?

No, you will never need to carry a balance to build credit. This is one of the most common myths about credit cards. Carrying a balance forces you to pay interest, which costs money and does nothing to improve your score.

What the credit bureaus want to see is that you can use credit responsibly. The best behaviors around credit cards are simple:

• Keep the card active by using it every month.
• Pay every bill on time.
• Keep balances below 30% of your limit (and under 10% if you want the fastest score growth).

Key takeaway: Carrying a balance is not required to build credit. Small, regular charges that you pay in full are the fastest and cheapest way to grow your score.

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FAQ: How much should I spend on each card if I want to improve my score?

Spend no more than 30% of your limit, and ideally no more than 10% of your limit. For example, if your card has a $500 limit, keep charges under $50. This keeps your utilization ratio low and shows the bureaus you’re not overextended.

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FAQ: What happens if I miss a payment on one of my credit cards?

Missing a payment can cause real damage because payment history makes up 35% of your FICO score. That said, the amount of damage depends on how late you are. 

The credit bureaus track payments in 30-day windows, so being a few days late may cost you a late fee but usually won’t show up on your credit report. Once a payment is more than 30 days late, it will be reported to the bureaus and can drop your score by 50 to 100 points. In addition to damaging your score, most credit card companies will raise your interest rate to what’s called the penalty APR, or default rate. 

A penalty APR is a higher interest rate your credit card company has the right to charge when you miss a payment, bounce a payment, or go over your limit. Instead of paying 17% or 19%, you could suddenly be paying 29% or more. Even if you catch up, many lenders will keep you at the penalty APR for six months or longer.

That’s why missing a payment hurts twice: it damages your score and makes carrying a balance far more expensive.

Beyond that, missing payments can trigger collections and lawsuits. Here’s the typical timeline:

Timeline	What Happens	Impact on You
1 to 29 days late	Late fee charged (usually $25–$40). Most issuers also trigger the penalty APR (25%–30% or higher).	Your credit score is safe for now, but you’re paying more in fees and interest.
30 days late	Payment reported to all three credit bureaus.	Score drops 50–100 points. Penalty APR continues.
60 days late	Second missed payment reported. Penalty APR locks in (may stay for 6+ months).	Score drops further; late payments stay on your report for 7 years.
90–120 days late	Account often sent to collections or charged off.	Major score damage, nonstop collection calls, possible lawsuits.

The best way to avoid missed payments is to set up autopays for at least the minimum payments and to set reminders so you never miss a full billing cycle.

Key takeaway: Missing a payment will hurt in more ways than one. A bill more than 30 days late can drop your score by 50 to 100 points, trigger a penalty APR of 25% to 30%, and even lead to collections if it continues. Protect yourself with autopay and reminders so you never miss a full billing cycle.

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FAQ: How long will it take to see results from using three credit cards responsibly?

If you use three cards consistently and pay on time, you will usually start to see improvements in your score within three to six months. Many people move into the 700s within about a year. 

To do this: 

1. Pay your balances on time. 
2. Keep your balances under 30% of your limit (and ideally 10% of your limit).
3. And, keep your accounts active. 

Remember, too, that credit cards are just one part of a high credit score. Credit-scoring bureaus want to see a healthy mix of accounts, so adding an installment account can help boost your score. On top of that, checking your credit report for errors, and then correcting those errors, can improve your score. 

We show you how to do both of those steps—opening the right installment account and disputing errors—in our free credit-education program, 7 Steps to a 720 Credit Score. 

Key takeaway: With three credit cards, one installment account, and a clean report, you can reach the “good” credit range in 12 months or less.

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