How many lines of credit should I have?

Lines of credit can offer flexible ways to access money. You may have one line of credit or choose to open several, depending on your financial situation. 

So, how many lines of credit should you have? Take a look at how to decide and what the potential advantages and disadvantages are for having multiple lines of credit.

Key takeaways

• The number of lines of credit you should have can depend on your spending habits, budget and ability to manage multiple payments.
• Having at least one credit line that you use responsibly could help you establish a credit history and boost your credit scores.
• Having too many lines of credit could result in taking on too much debt and negatively affecting your credit scores.

Ultimately, there’s no hard-and-fast rule that states the number of lines of credit a person should have. It all depends on your situation. But having at least one line of credit you use responsibly may be beneficial and could help you establish a credit history with the three main credit bureaus.

The exact number of lines of credit you may want to have could depend on a several factors, such as:

Having a higher income could mean you’re able to qualify for lines of credit with higher limits. When you apply for credit, lenders often look at your debt-to-income (DTI) ratio, which tells them how much debt you have relative to the amount of income you earn. With a higher income or DTI ratio, lenders may view your financial situation and application favorably.

Having more lines of credit could pose a risk if you tend to overspend each month. Keep in mind, managing your spending and not getting close to your credit limit can help your credit scores.

Like credit cards, the money borrowed from lines of credit must be paid back. If you’re confident about making multiple payments, having several lines of credit may be a good fit for your needs. But if you think you might struggle with multiple payments at different times, you may want to consider sticking with a single line of credit. 

Remember, missing payments or making late payments is typically reflected in your credit reports and could cause your credit scores to drop.

Having several lines of credit could offer some advantages if you use them responsibly:

• They may improve your credit scores. Having multiple lines of credit means your total available credit limit is higher, which can make it easier to keep your credit utilization lower. Your credit utilization measures how much available revolving credit you’re using, and it’s a credit-scoring factor. So when you use less of your available credit, you may see your credit scores increase.
• They might simplify expense tracking. When you have multiple lines of credit, you could use each one for different purposes. For example, you may want to use your home equity line of credit to pay for home repairs and a personal line of credit to pay for a wedding. This could help you keep track of your expenses more easily.

Though having multiple lines of credit can be beneficial, you may want to consider the following:

• There’s a potential risk of taking on too much debt. When you have multiple lines of credit at your disposal, you may find it tempting to spend more. If you can’t afford to pay off what you spend in full, you may end up taking on more debt than you can comfortably manage.
• Applications could have an effect on your credit scores. When you apply for a new line of credit, the lender may perform a hard credit check to see if you qualify. This hard credit check can cause your credit scores to drop temporarily.
• It may hurt your overall credit age. When you open a new line of credit, the average age of your credit history might decrease. That’s because the average age is calculated with the total length of time you’ve had each account. If the average age drops, it may have a negative impact on your credit scores.

Just as there’s no fixed rule about how many lines of credit are ideal, there’s no rule about how many lines of credit are too many for one person to have. It all depends on your situation. If you’re confident that you’ll be able to make the payments, opening one or more may be a good idea. But if you think it would put too much strain on your finances, you may want to avoid it.

Still wondering how many lines of credit you should have? Take a look at these frequently asked questions to better understand your needs.

Opening more than one line of credit may be a good choice if you’re confident that you can make your regular payments each month. But every situation is unique.

Considering applying for a new credit card instead? See if you’re pre-approved with no impact on your credit scores.