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Too much credit available. Myth or fact?

Hi, I've heard that it's possible to have too much credit available and that this can have a detrimental effect on chances of getting a mortgage. I'm currently doing some credit housekeeping as I want to apply for a mortgage soon. Can anyone please tell me whether I should cancel some of my credit cards (I have 3 - total credit limit £16,500 and if I use them they are paid off every month in full)?

Also, I have quite a few savings accounts which I don't use as I only opened them for temporary canny money saving purposes (like the tesco clubcard offer one).
Should I also close these in order to boost my rating?

Or is this all a myth? Any help would be appreciated! Many thanks.

Comments

  • Before I applied I had about £20000 worth of credit. I cancelled a couple of catologues that I never used and on a couple of other things I reduced the limits. For example Next catologue-£4000 limit,reduced to £300. Anyone in their right mind would never bump a catolgue up so high so why have it? My broker advised me to do this and ive had no probs whatsoever with the mortgage application. I suppose lenders think that if you take out a mortgage and then use up all available credit there is risk of falling behind with payments. But dont get rid of everything some credit is good.
  • Savings accounts are not credit.

    You can have TOO much credit available.

    If you don't need 16.5k CC limits then reduce them
    Bank Accounts - Barlcays Premier[/B] - £1000 o/d, HSBC - £200 o/d- First Direct - £500
    Credit Cards - Barclaycard £2000 - Silver Card £1300 - Flybe £7500 - HSBC £1000 - First Direct £2500 First Direct Gold £3000
    6 credit accounts closed in 2010!

    Official SOS Club number 001 - Dry until 01.07.10
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