How Total Accounts & Derogatory Marks Impact Your Credit Score

Two for one here, let’s break down the total accounts and derogatory marks credit score factors!

These are two of the more straightforward categories that impact your credit score. While they are not extremely complex to understand, they are very important and each impacts your credit score differently. Let’s begin by defining both factors.

Total Accounts

“Credit cards are not the problem – habits are”


Simply put, the total number of open credit accounts you have impacts your credit score. While this is considered a low impact factor, this is one of the easiest factors to influence! While always being mindful of things like annual fees, it is quite easy to simply open up a new credit card. Some might even say it is too easy!

The higher the number of accounts we have open, the better our credit score gets!

What is most important to keep in mind here is older cards that you have. Provided you are not paying an annual fee (at least not a significant one) it makes more sense to actually keep these cards open as opposed to closing them!

Debt “Gurus” often advocate closing all credit cards and cutting them up. I like to say that credit cards are not the problem – habits are. Not only does closing out an old credit card hurt the total accounts portion of your score, it can have a dramatic impact on other parts of your score like utilization!

Lowering your total line of credit and your total number of accounts is definitely going to send your credit score down, not a good thing!

One last thing to consider, it is not unheard of for a company to close out a card for you if it stays completely inactive for a long period of time. To keep this from hurting the total accounts portion of your score, consider keeping one of your small recurring monthly charges – like a streaming service for example – on the card so that it maintains some level of activity. Just don’t forget to pay it off in full!

In Summary

The total number of open accounts does not have a major impact on your score, but we want to fire on all cylinders here and level up that score!

Derogatory Marks

Derogatory marks can be a result of many different mistakes/issues – bankruptcy, late payments, foreclosure etc. – and have a high impact on your credit score. These can essentially be thought of as infractions. If you do something that you shouldn’t, or fail to do something that you should from a credit perspective, these can happen.

Credit Karma wrote an excellent article here diving further into these.

These should be avoided at all costs! While you can always attempt to contest these, if you incur one of these it can take nearly a decade for it to drop off of your credit report.

In Summary

An ideal number of derogatory marks is 0. This factor severely impacts your score in a negative way and you should do everything in your power to avoid them. The best way to stay on top of this is to check your score often. I like to suggest checking monthly at a minimum!

How can I hack these credit factors?

When it comes to derogatory marks, stay on top of anything that may cause them and check your credit score frequently. In the event that you are impacted, it is likely a good idea to seek the council / advice of a CPA so you can attempt to contest the mark.

You also always want to watch out for identity theft here. If someone steals your identity and does some shady stuff, you can incur these! As I said above, just check your score often to stay on top of this!

As far as total accounts go, it is easy to boost your score here! While opening new accounts can incur a temporary hit to your score due to a hard inquiry (read more here), you ultimately will boost your number of total accounts and utilization factor by opening new lines of credit!

There are often great deals and incentives as well. I have personally made hundreds of dollars by opening cards that require me to spend $X in the first few months of opening the card. I simply use the card for my required expenses and have no trouble hitting the number! Keep an eye out for great offers!

The biggest thing to keep in mind with this factor is annual fees. I personally err on the side of not opening cards that charge an annual fee, though the argument can be made that some have enough rewards to benefit you. Always do the math!

Thank you so much for taking the time to read this article. Please do not hesitate to reach out with any questions, comments, or suggestions!

My contact information can be found here!


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