With over 20 years of experience, a credit expert shares the biggest mistake they made with their first card and how they corrected it, ultimately improving their credit score.

John Ulzheimer, with over 20 years of experience in the credit industry, has worked at FICO, Equifax, and Credit.com. However, when he first started using credit, he made what he now considers his biggest credit mistake: using only one credit card with a low limit.

He tells CNBC Make It that he successfully navigated college and entered the professional world with only one credit card, which had a credit limit of $600.

Despite always paying his bills on time, his credit score was lower than he thought it should be because his credit card was almost always maxed out or close to it.

"I believed that since I was making payments, my credit must be excellent," Ulzheimer remarks. "However, upon entering the credit industry, I discovered that this approach is not the most effective way to manage credit."

How credit scores are calculated

Ulzheimer, after working in the credit industry, discovered that his FICO credit scores were calculated incorrectly due to a mistake he made. Experts recommend keeping your credit utilization rate, which accounts for 30% of your credit score, under 10%.

To improve his credit utilization rate, he decided to increase the number of cards in his arsenal and ensure they had higher credit limits, despite his low Ulzheimer's limit.

He learned how to manage multiple credit cards instead of relying on just one.

Improving his credit utilization rate and increasing his overall credit limit by having more credit cards.

When he exceeded $60 on his initial credit card with a $600 limit, his credit utilization rate surpassed 10%. Nevertheless, after increasing his limit to $10,000, he could spend up to $1,000 without exceeding the 10% threshold.

What to consider before opening multiple credit cards

Increasing credit limits by opening more cards may not be beneficial for everyone looking to improve their credit score, as it requires self-control to manage multiple cards with higher limits responsibly, according to Ulzheimer.

He remarks that some individuals believe possessing a $10,000 credit limit implies having $10,000 in cash, allowing them to spend recklessly.

"It's acceptable to possess multiple cards and have high credit limits, as long as you manage them responsibly," Ulzheimer advises.

To prevent overspending, you might consider using debit cards instead of multiple high-limit credit cards.

Ulzheimer states that it requires self-control to resist overspending and engaging in reckless spending, even when one has the ability to do so.

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