Credit Score Affected?

SKJ28

Hi,

I have 3 different credit cards which have all been used for balance transfers. Am I better off cancelling these all together when I get a new card (does the more inactive cards you hold affect credit rating)?

Does the same apply for current accounts? I currently have 2, but I am thinking of changing to avoid high interest rates.......should I close the old 2 once I get a new one?

Hope someone can help.

Many thanks.

stephane_2

Having too many inactive accounts will not help your overall credit score but I would keep at least one and the one you've had the longest. Before applying for another credit card I would wait for your file to be updated with the closed accounts, that can take 2/3 months. Having 2 bank accounts will not have a huge impact as long as the accounts have been well managed and that you're nt using the overdraft regularly.

Mr.Mulla

If your goal is to raise your credit score, I suggest to leave your accounts open. Because that way you leave more open credit in your name. If you do not use the credit, it helps with credit utilization. This is important for keeping your score high.

izools

HOWEVER - there is a fine balance.

The other factor to take into consideration is "exposure to credit". Although you may have a £0 balance on several cards, some credit providers don't like a debtor to have "access" to more than 50% of their annual salary in the form of lines of credit.

This figure can vary from creditor to creditor and also depending on the rest of your application, but about half is a good figure to keep in mind.

As long as your total credit limits equate to under half your salary, and your total debts (excl. mortgage) equate to under half your total credit limits, you should be fine. Cross the half way mark on either front and you may be in danger of harming your credit worthiness

SKJ28

Ok, thanks for the replies. Clears things up a bit!