In terms of credit rating for getting a mortgage, are having lots of credit cards and high available credit better? My wife has great credit and two credit cards already, but we are planning on applying for a mortgage early next year and would like to improve our chances in any way. So, in Taiwan, does having lots of cards help you, or does it look bad? Obviously we don’t and wouldn’t let any of the cards occur interest, and we always pay off in full at the end of the month.
This site has some info:
https://www.money101.com.tw/blog/辦太多張信用卡會被扣分-信用評分常見七大迷思
Machine translation:
Myth 1: The action of “applying for credit rating” will affect the credit score
A: No. Self-querying the credit score report will not affect the credit score. Only the business inquiry of “loan application” will affect the judgment, and in the past year, multiple inquiries every 30 days will be combined.
Myth 2: As long as you don’t apply for a credit card or loan, the credit score will be very good.
A: If you have never had a credit or loan relationship with a financial institution, or a “credit beginner” with less than three months of interaction, the bank will not be able to judge your repayment ability and mark it as “temporarily unable to score”. Use credit reasonably, borrow and repay, and credit scores can slowly accumulate!
Myth 3: Applying for multiple credit cards in a short time will affect credit scores
A: No. When applying for a credit card, the inquiry action on the bank side is not included in the credit score judgment, so applying for multiple credit cards in a short period of time will not be deducted.
Myth 4: Having more than one credit card will reduce the credit score
A: The credit limit is not one of the score criteria. Therefore, credit cards are payment tools, and no matter how many cards there are, they will not affect the credit score.
Myth 5: As long as you don’t max out your card, it won’t affect your credit score
A: Personal debt status is one of the reference aspects of credit score. Excessive use of credit card limit may lead to lower credit score. It is recommended that if there is a short-term consumption demand, you can pay off part of the credit card payment first to reduce the usage rate of the limit.
Myth 6: Credit card instalments affect credit score
A: Not necessarily. “Consumption instalment” and “billing instalment” are consumption behaviors, and the Joint Signing Center does not directly include them in the scoring. However, “cash advances” represent an individual’s short-term funding needs and can affect credit scores.
Myth 7: The higher the credit score, the better the loan application and the better the interest rate.
A: Credit score is not the only criterion for loan verification. Banks will still measure the conditions other than the credit information of the Joint Enquiry Center, such as income, occupation, collateral, etc., and comprehensively evaluate the loan amount and loan interest rate. Conversely, even if the credit score is slightly lower, it does not mean that the loan application will inevitably encounter obstacles.
You might want to check what the bank considers to be your credit liability though. My mom said that when they took out the mortgage for their house (30 years ago), every card they had was considered to be $50 in debt, regardless of what actual balance was on the card. When it comes to a mortgage payment, if you have multiple credit cards, it could limit the monthly payment that you are seen as being able to pay (and that was 50 bucks in 1990 numbers). But I don’t know about Taiwan.
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