Existing cards and effect on credit rating/limits

No_6

YB

But if THEY can see it for 6 years ie £57500
and £39700 = 139% of salary on current credit
and still give me another 2 - 0% cards.
Why do we worry ?
Are we getting to paranoid ??
when we don't know for sure how the CC's operate

Regards
No6

lisyloo

Why do we worry ?

Because if you "hit the buffers" then you will be declined.
If you apply several times you will then have serveral searches in a short space of time.
Lenders will assume that you have been declined if they see lots of searches in a short period and they will assume this is bad and decline you also.
Hence you will be unable to get credit.

Are we getting to paranoid ??

I don't think so.
It would be terrible if you wanted some real money (as opposed to stoozing) and you couldn't get the credit e.g. couldn't get a mortgage.
Even a delay could lose you a house.

If you are never going to want to borrow any money for real, then don't worry, but most people will at some point and I think it is something to be concerned about.

when we don't know for sure how the CC's operate

Well actually some people do have inside knowledge.
Some people who contribute to these boards work for lenders and do know what goes on.
If you listen to other people you will learn a lot but obviously you can't take everything you read to be true, you have to apply some cynicism, but on the other hand you can learn a great deal.
Don't dismiss what others say out of hand.
They ARE people who know a bit about how these things work.

No_6

Lisyloo

Still think you are missing the point of my post.

I don't close all my cards after I have used them for free BT's,
so if I need credit, I can use my old cards.
ie 2k on Virgin (was 18k), 14.4k on Egg Green, 6k on Sainsburys.
I have a mortgage and as an old git wont be going for a new one !

What I'm trying to say is that as an OLD TART, 2 year old stoozer,
with 13 closed cards, 5 current cards, now 7 with 2 new ones on there way.
I am still being accepted for new 0% deals.

Is an old perfect credit record better than one with all old cards closed.

Regards
No6

lisyloo

so if I need credit, I can use my old cards

You probably couldn't use your old cards for a mortgage and whilst you personally might not need one, my points were meant to be taken generally and I think most other people WILL want some credit at some stage that they can't get on cards.
Also won't the credit on the old cards be quite expensive?
In your personal situation I agree, not a lot to worry about.

I have a mortgage and as an old git wont be going for a new one !

But you might want to borrow some money for a hip replacement :-)
Only joking !!
Seriously though, you might want a loan and won't that be expensive on old cards without a promotional deal?

What I'm trying to say is that as an OLD TART, 2 year old stoozer,
with 13 closed cards, 5 current cards, now 7 with 2 new ones on there way.
I am still being accepted for new 0% deals.

Good for you.
I would simply warn others that it might not work for them as their credit record may be different, so it cannot be relied upon as a watertight strategy in general.
As you say, unless you understand the ins and outs of every lenders policy then it's difficult to know what they will do for different scenarios.

Is an old perfect credit record better than one with all old cards closed.

Up to a point I think the answer is yes.
But SOME lenders may have a problem with total available credit.
I think it's very difficult to be black and white without knowing every lenders policy.
In general I close old cards because
a) old cards can be used fradulently if stolen (and I don't have a safe).
b) I can apply to the same company as a "new" customer for promotional deals.
c) I want available credit
d) some companies e.g. tsb have started closing them anyway
e) some companies apply "low usage" type fees and I don't want the hassle of keeping on top of the changes to terms and conditions all the time.

So basically I don't want the hassle.

I don't hink you have anything to worry about.
But I would argue that it doesn't necessarily follow that your strategy would work for everyone.

johnsmith_4

YorkshireBoy wrote:

John, I'd be very interested to know what your total available credit is, as a percentage of your salary. Also, how much of this are you actually "using"?

The reason being that you appear to be operating outside the "norm" for a stoozer.

my salary is around 25k, I have available credit on cards of 107k, my stooz pot at the moment is around 20k, I also have 2 interest free overdrafts that I use to make the minimum payments on the credit cards. I check the balance of every card every day to make sure there are no fraudulent transactions on any of the unused cards. I also check my credit report once per week to see if anyone is applying for credit in my name, this may seem extreme but it helps me sleep at night.

Reaper

I'm impressed that you managed to get that much available credit. My experience has been that current debts are the most important figure but that total credit limits do also have an effect.

My rule of thumb is not to let my current debt show greater than my salary on any one credit report, and my available credit not to go much above it either. That's not to say it's my real limit, just what they are aware of. For example in the past I have been way above it thanks to a £25k First Direct credit card which never showed on any CRA report.

I'm always interested to hear of exceptions to rules, though until I see a pattern emerging I'll continue advising people to close down credit cards they no longer have a use for.

johnsmith_4

Reaper wrote:

I'm impressed that you managed to get that much available credit. My experience has been that current debts are the most important figure but that total credit limits do also have an effect.

My rule of thumb is not to let my current debt show greater than my salary on any one credit report, and my available credit not to go much above it either. That's not to say it's my real limit, just what they are aware of. For example in the past I have been way above it thanks to a £25k First Direct credit card which never showed on any CRA report.

I'm always interested to hear of exceptions to rules, though until I see a pattern emerging I'll continue advising people to close down credit cards they no longer have a use for.

Its all good having lots of credit available but unless the CC company offers me a competative interest rate then its a waste of time. I have just received an offer from Halifax with a LOB rate of 4.95% but with a 2% fee (no max), this is no good with the 2% fee. I asked them to reduce the fee but they refused. I will sometimes do a balance transfer even if i am not going to make any money out of it because I find that if you have a large outstanding balance and good payment history the CC company offers increasingly large credit limits every six months and with larger limits you can make more money.

[Deleted User]

I realise that the cc companies have access to your credit history but how do they verify your earnings? As far as I know, they rarely ask your employer (having seen incoming mail). Can they get an indication from your main bank account provider?

No_6

They have never checked with my employer
and will not have access to my main bank account.

Regards
No 6

[Deleted User]

So how do cc companies verify what applicants tell them as far as earnings are concerned? I ask cos I went self employed last year and so proving earnings is harder then it used to be, tho I got a card with Nationwide no probs without telling any fibs.