Closed Credit Card Accounts

JA1000

I am sure there will be a post on here regarding Capital One the proposal to close accounts. I wanted to obviously keep the lower rate so opted for closure when paid off but I may be in a position to do this sooner

My credit score is currently very poor, with no defaults all payments up to date, basically all green. They only reason I can see is because I have utilised 89% of available credit.

My question is if I pay off these closed accounts I have two additional ones with MBNA, what impact will it have on my credit score. I can see a potential that this will get worse becuase they will no longer exist so my other cards which are closer to the limit will show say 95% of available credit being used even though I have just paid a card off.

How long will they be on the credit report for, my Capital One has a limit of £8k or will it not be taken into account.

I want to and need to get that score changed but I want to do it with the right cards and I'm not convinced on these closed ones.

stephane_2

Any closed accounts will remain on your file for 6 years from the moment they are closed

JA1000

And with the credit limit then I presume? So if I pay off my £8k card it will still look like it's available and reduce my overall %?

stephane_2

If the account is close & settled then no the credit limit will say £0

JA1000

So paying these off first will not help me at all in my quest for an improved score yet whilst they are outstanding they are not helping, catch 22. I could pay them to a point where they are lower and it will help reduce the % outstanding.

stephane_2

You need in some way to reduce the outstanding balance on your credit cards which are still open, that might give you more chances in the future, but what is important for a lender as well is what is your level of debt ratio to annual salary, all sorts of factor are taken into account and not only your outstanding balance

CannyJock

JA1000 wrote: »

My question is if I pay off these closed accounts I have two additional ones with MBNA, what impact will it have on my credit score. I can see a potential that this will get worse becuase they will no longer exist so my other cards which are closer to the limit will show say 95% of available credit being used even though I have just paid a card off.

How long will they be on the credit report for, my Capital One has a limit of £8k or will it not be taken into account.

I want to and need to get that score changed but I want to do it with the right cards and I'm not convinced on these closed ones.

So you have 3 accounts that you've "closed" to freeze the interest?

Forget about the Experian credit scoring and trying to improve it - pointless exercise.

If you have the money to clear the cards sooner and avoid the interest charges then that's the only sensible thing to do. Clear them in order of highest-APR first to further reduce the interest you pay - continue making minimum payments on the other 2.

Once they're repaid in full, they'll report to the credit agencies as Settled. Your "available credit" will be £0 from them obviously, but they'll still report what the credit limit was which you can refer to in any appeal letters if necessary.

% utilisation isn't the most important factor in determing whether you'll be successful in new applications - total available credit as a % of salary is much more important IME.

Clear the cards and close them as soon as possible and you'll improve your score with real-life creditors.

JA1000

The reason I am looking to improve my 'very poor' score is I am trying to remortgage and include this unsecured debt, I have been refused due to credit score and this is the only thing on my report which stands out. However with the remortgage all this will be clear and using the forecasting tool my score goes immediately from very poor to Excellent 999.

I have not closed the accounts the credit card companies have chosen to do it due to in activity, I used them to transfer from other cards following a house build.

Why is it insisted on paying off the highest interest first?? Let me give an example, I have two cards with £7k on them

Card 1 £7k - minimum payment £110 20% interest appx
Card 2 £7k - minimum payment £220 12% interest appx

I will be aiming to pay off card 2 the lower rate first because this releases more monthly capital to speed up repayment of Card 1

With mortgage lenders screwing down on lending I think this is my quickest way out.