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I have 23 accounts listed on my credit reports: 13 revolving accounts, seven mortgages (!), two auto loans and one student loan. Of course, not all of them are open or active. Some of the mortgages have been refinanced (more than once), some of those credit cards sit in a drawer unused, and the student loan was paid off years ago, as was one of the auto loans.

But still, 23 accounts is a lot. Should I be worried that big number hurts my credit scores? I am not the only person who has wondered that same thing when reviewing their credit reports. A Credit.com reader asks:

I have a lot of credit cards that I will be able to pay off to a zero balance, does that mean if I keep the accts open but keep the balance zero it will not affect my score negatively?

When it comes to credit scores. having “too many accounts” is probably not anything to worry about. “If you are managing all of your credit cards responsibly, i.e. keeping your balances below 30% of your available credit and paying all of your bills on time, then the FICO Score doesn’t care how many credit cards you have,” says Anthony A. Sprauve, senior consumer credit specialist with FICO/myFICO.com.

What about other credit scoring models? Might they look at it differently?

“While a consumer will not be penalized for having too many credit accounts specifically, a consumer’s credit score could be negatively impacted by opening up numerous credit accounts within a short period of time,” warns Sarah Davies, senior vice president–analytics, product management at VantageScore.  She adds that this “creates multiple inquiries and impacts that consumer’s total credit balances, which is considered to be moderately influential in the VantageScore model.  It’s better to focus on having the right mix of credit accounts instead of a finite number.”

The Real Trap

But there can be a definite downside to having a lot of credit accounts outside of credit scoring, and it relates to something researchers call “debt account aversion.”

“Researchers have proven that we feel overwhelmed when we have many open accounts with different lenders,” said Carrie Rocha, founder of PocketYourDollars.com in an email. “Even if you and I owe the same total amount of money. If you owe it to one lender and I owe it in pieces to six different lenders, then I am more stressed.”

Rocha knows that feeling of stress firsthand. She and her husband dug out of some $60,000 in credit card debt spread among multiple cards.

Juggling multiple debts can can lead to financial mistakes. For one thing, it is easy to lose track of how much you owe. “If you have to look at several accounts to see what you’ve spent, it’s very difficult to get a handle on your spending,” says Mikelann Valterra, co-founder of the MoneyMinder financial tracking program. It’s also easier to miss due dates when they occur several times a month.

In addition, trying to pay off multiple debts can lead you to make poor financial decisions. The researchers Rocha was referring to found that study participants who were presented with multiple debts consistently preferred to pay off smaller debts first in order to reduce the number of accounts with balances, even though paying off debt with higher interest rates could help them reduce their overall debt faster.

In other words, they focused on reducing the number of accounts with balances at the expense of a cheaper, quicker way out of debt.

The takeaway? By all means, get your free credit reports to learn what accounts are reported, but don’t stress out about the number of accounts on your reports. Payment history and how you manage your debt are more important.

But if you are carrying debt on multiple accounts, understand that’s probably creating financial stress, and you may be paying more in interest than you need to. Consider consolidating your debt with a low-rate personal loan or a balance transfer. If your credit is not great, enrolling in a Debt Management Plan with a counseling agency can have the same effect.

Finally, when you do pay off credit cards, there’s no need to close them out unless the issuer is charging an annual fee and refuses to waive it. Those accounts you don’t use anymore shouldn’t hurt your credit scores, and they might even help.

If you want to see how your accounts are impacting your credit scores, the free Credit Report Card will update two of your scores every month and give you a breakdown of the major factors impacting your scores.

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