Can Cancelling unused credit cards damage ur credit rating?

keza

As above...

iceage3

No i think it would help u.

But the question is can u get more credit.(if u need it)

like the report i saw the other day people are holding on too there unused cards because of the credit crunch.

so2006

I would stick on to them

(I think) They help your credit rating a bit

keza

Its my other half. he has abput 5 credit cards, 3 are unused now for years. but he said hed rather not close them as he's heard it damages ur credit rating. his credit report is 100% and he can get credit always (got his own mortage last year then a £6k credit card!!!-i strive to be like him lol!)

SO yeah, i think he shud close them incase he needs them in the future but for a new customer deal?

iceage3

How can u get 100% credit report?

stephane_2

If he has 5 credit cards and 3 of them have not been used for a long time then I would suggest he cancel them, it will not affect his credit file, to the contrary, lenders do not like seeing too much available credit which is not being used.

keza

iceage3 wrote: »

How can u get 100% credit report?

I dont mean literally 100% but i mean its at the top end of excellent

keza

stephane wrote: »

If he has 5 credit cards and 3 of them have not been used for a long time then I would suggest he cancel them, it will not affect his credit file, to the contrary, lenders do not like seeing too much available credit which is not being used.

Thanks thats what i said to him

iceage3

Does he know is credit score and as he been to bank or advisor .they would know if u have too much credit .too much credit is not bad unless u cant pay it off.

Moggles_2

The national average is five, so if he has five credit cards or fewer and none is maxed out, it's unlikely his credit rating would be harmed by keeping these cards, unless he has a lower than average annual income. That said, with each successful credit card application, his available credit will increase in relation to his income and there will come a point when he must consider closure.

I think you have to treat each credit card on its own merits. IME, some card companies (eg. Barclaycard, MBNA) have regular, existing-customer offers and MBNA will even waive BT fees sometimes, if you're prepared to negotiate over the phone. Others (eg. HBOS, HSBC) reserve their best deals for new applicants.

In general, unless a card has a particular benefit, then I would close the account. Firstly, having lots of credit, even if not used, may put off potential lenders and secondly, by cancelling a card he can re-apply to that provider as a 'new' customer and take advantage of any introductory deals on offer.

Another good reason for phoning customer services to cancel an unused card is that occasionally you're offered an incentive to stay

P.S. Some lenders will not consider applications from former card holders for various periods following closure. Others accept applicants straight away.

In all cases, it's advisable to check his credit reports to make certain the account is actually closed down and marked "settled" before he re-applies.