People With Just One Credit Card Have Better Credit Scores on Average — Here’s Why
Written by
Cindy Lamothe
Edited by
Rebekah Evans
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Accumulating credit cards almost seems like a rite of passage for many Americans — and it’s incredibly enticing to have many. Seeing someone whip out a stack of flashy cards makes it seem like they have their finances together.
But not so fast. As it turns out, having too many can work against you.
“When it comes to managing your credit score, simplicity often wins,” said Dayten Rynsburger, chief revenue officer (CRO) of Niche Capital. “People who only have one credit card tend to have better credit scores on average.
According to experts, there are a few key reasons for this. Read below for their insights.
Also here is the suggested minimum credit score.
Having Just One Card Makes It Easier To Manage Your Finances
First of all, you’re less likely to forget about a payment or get overwhelmed by multiple due dates.
Rynsburger said this reduces the chances of late payments, which is crucial because payment history makes up about 35% of your credit score.
“By keeping everything consolidated, you’re more likely to maintain a flawless payment record,” he said.
Abid Salahi, finance expert and co-founder of FinlyWealth, said a longer credit history with a single card can contribute to a higher credit score.
“The length of credit history makes up 15% of one’s FICO score and those with a single, long-standing credit card account benefit from this factor,” he said.
It Keeps Your Credit Utilization Low
According to Rynsburger, having one credit card can keep your credit utilization low.
Credit utilization — the percentage of your available credit that you’re using — plays a significant role in your credit score, accounting for around 30% of it.
“With only one card,” he said, “you might be more mindful of your spending, ensuring you stay well below the recommended 30% utilization rate.”
In contrast, Rynsburger said juggling multiple cards can lead to higher overall utilization, especially if you’re spreading your spending across them.
Salahi advised the same. “Undoubtedly, the key factor driving this trend is the credit utilization ratio,” he said. “Credit utilization, which accounts for 30% of one’s FICO score, is the ratio of the total amount of credit used compared to the total available credit.”
He explained that individuals with a single credit card typically have a lower credit utilization ratio, as they have less temptation to overspend and max out their available credit.
“Data shows that people with just one credit card have an average credit utilization ratio of 24%, compared to 32% for those with multiple cards,” Salahi said.
It Reduces Hard Inquiries on Your Credit Report
Another factor is the potential for fewer hard inquiries on your credit report.
Each time you apply for a new credit card, the issuer typically performs a hard inquiry, which can temporarily lower your score.
“By sticking to one card, you avoid these inquiries and the accompanying dips in your score,” Rynsburger said.
It Fosters Better Financial Discipline
“However, the lesson here isn’t that everyone should rush to close their extra credit cards,” Rynsburger explained.
Having just one card works well for those who are disciplined and prefer simplicity in their financial management.
“It forces you to be intentional about your spending and helps you avoid the pitfalls of overextending yourself with too much available credit,” he said.
Salahi similarly agreed. “Maintaining a single credit card account can foster better financial discipline,” he said.
With fewer accounts to manage, Salahi said cardholders are more likely to make on-time payments and keep their balances low, which is crucial for building a strong credit profile.
“According to a study by Experian, consumers with just one credit card have an average credit score of 750, 34 points higher than the national average,” he said.
For those looking to optimize their credit score, Rynsburger said the takeaway is clear: Whether you have one card or multiple, the key is responsible management.
“Keep your utilization low, pay your balance in full and on time, and avoid opening new lines of credit unless absolutely necessary,” he said. “By following these principles, you can achieve and maintain a strong credit score, regardless of how many credit cards you choose to carry.”
Salahi shared the same opinion. “Simplicity and financial discipline associated with using just one credit card can lead to a better credit utilization ratio, payment history and credit history — all of which are key determinants of a strong credit score,” he said.
By understanding these underlying factors, experts agreed that you can learn to leverage a single credit card to maximize your creditworthiness.
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