Having too many open credit cards is bad for your credit history

If you were a child of 1980s, you may remember watching television shows or movies that would have a supposedly wealthy person flashing all of the credit cards in their wallet to show how rich they were. It seemed like they really had it going on in life. It showed kids that by having all of these credit cards, they could get almost anything that they wanted. Unfortunately, it did not show or give any information about the actor or actress paying the money back. Why would they? That would be boring wouldn't it!

Kids and teenagers of this generation grew up thinking that a person with lots of credit cards were cool and rich. Seemed like a person really had to be someone special to have all of that plastic. As these kids and teenagers grew older into young men and women, most have realized that a person with a ton of credit cards is a fool. They are most likely a person who is in debt and is having a difficult time making all of those credit card payments. Believe it or not, there are people who have 20 or more credit cards. They will have lots of different Visa cards, MasterCards, Discover Cards and many others. If you really put some thought into this, a wealthy person would not ever need this many different credit cards. If a person had a good credit history and made a large amount of money, they would be able to get a credit card with a very large credit limit. It would be the only credit card that they need. The person with 20 or so credit cards most likely has small credit limits on each one. $300 limit on this card, $500 on that card, $1000 on their oldest card and so on. This is a big problem that will one day haunt them.

Having too many credit cards automatically has a negative affect on a consumer's credit report and will keep their credit score lower than what it could be. Sure, it is great that all payments are being made on time every month, but when a person has too many open accounts, it is never a good thing. A person's credit score is basically a scale of what risk a person is of non-payment. When there are lots of open credit cards, this will naturally make a person a higher risk of defaulting on their credit cards.

A person should never have more than five or six credit cards. Some experts feel that even this is too many. For those who are trying to rebuild their credit or are starting out with their first credit card, one credit card is enough. As years go on and money management skills improve, three credit cards should be fine. It can be tempting to open up new retail store credit card accounts when a store is offering a promotion or sale for their credit card holders. A person will need to be disciplined or else they may find themselves in a mess one day when they find themselves having 20 open accounts.

Credit cards give people a false sense of security. Sure, they can help a person out in times of need, but does that person have the financial means to pay it back? Credit card companies have long gotten themselves and their customers in trouble by handing out credit cards like candy. Besides that, the credit limits that they give some people are far too high than what a person can afford. Remember, credit cards companies are a business that wants to make money. They need to stay profitable to run their operation. They can do a great deal of good for those who are responsible enough to manage their money properly. A person just needs to be wise when they are deciding whether to open up a new credit card account or not.

Employers taking a look at applicants credit history

More and more employers are taking a look at job applicant's past credit history as a criteria in their decision whether to hire them or not. One would think that this is limited to jobs that are in the financial sector, but it is going on in all industries. In the past, it was common for a person with bad credit to rarely be hired in a position that handled money. With all of their financial problems, they posed as a person who would be tempted to possibly steal. Now, positions that have nothing to do with money transactions are protected from people with bad credit.

When interviewing a potential employee, an employer will want to get a feel of the person. This is done of course with general questions about their education, past job history and by asking questions such as "What can you do for our company?" This is all understandable and is what we are all familiar with. Interviewers sometimes even like to ask questions that will put a person under pressure to see how well they handle it. Again, this is something very understandable that we are all used of.

Another thing that will not come as a surprise to anyone is the background checks that companies do. They want to make sure that the person that they are hiring is not a former felon with a long criminal record. Businesses do not have any room available for drug users, thieves or abusers. Of course people do some things when they are young that they are later ashamed of, but the employer does not know you and when there is a criminal history on paper, it is all they are going to go by.

Now, we come to the credit check. The way companies look at this is that if a person cannot fulfill their financial responsibilities, it says a lot about them. Companies want employees who are responsible and pay their bills on time. They do not want people who make excuses as to why they could not pay their bills on time. They want people who have solutions to problems, and when a person shows that they did not have a solution to pay their bills when they did not have the money, a company sees that as a negative. They want to hire people who can find their way out of extreme circumstances to get done what needs to be done.

Law enforcement agencies are very strict on the credit profile of new cops that they are considering to hire. There is far too many stories of young men or women who have always dreamed of becoming a police officer only to get disqualified during the long hiring process because of their bad credit. The sad part is that many of these applicants do not know that their credit will have had an impact on their career choice. Many of these people are applicants that are in their early twenties, probably straight out of the military and had their whole life planned around a law enforcement career. It is a shame because many of them could have possibly been great officers.

Whether we agree with getting judged by our credit score or not, it is used by employers as part of our make-up and is not going to change. Employers want to know all about who they are hiring, and with technology these days, they can find out almost everything. Remember, having good credit is not only important to purchase a car or to buy a house, it is also important to gain employment.