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Cancelling Credit - good or bad for credit score?

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I have two credit cards - one I use all the time and pay off every month (barclaycard cashback) and one that I have had for years (MBNA platinum) which I virtually NEVER use - it has a £6000 limit. I got it years ago to get a [naff] free gift and I just never cancelled it.

In terms of credit score, is it better for me to keep the card and show "low credit utilisation" (ie: I can have cards and not max them out) or should I cancel the card, as I have heard it can negatively affect credit score to have available credit (because it's almost seen as a loan in itself anyway up to the maximum amount, and would affect the amount I could get for a large loan I really need).

I'm asking in terms of the implications on potentially getting a large loan (re-mortgage) sometime soon - I've seen different advice on this and it's completely contradictory.

Comments

  • PNPSUKNET
    PNPSUKNET Posts: 4,265 Forumite
    I have read about this for sometime, to be honest I think too much is too bad and closed are better as it showed you stuck to the agreement. Who knows
  • as far as i am aware, having too much credit at your disposal goes against your credit score so if anything it would only improve your rating.
  • CannyJock
    CannyJock Posts: 3,838 Forumite
    1,000 Posts Combo Breaker
    It'll have some affect, but how significant is hard to say. From what I'm seeing, total credit is more significant than % credit used. If you don't need the card as a spare, then might as well cancel it.

    It can take up to 2 months for the card to show as settled with the CRA's.
    "A child of five could understand this. Fetch me a child of five." - Groucho Marx
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