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Lots of credit card closed accounts - good or bad
walesrob
Posts: 1,150 Forumite
in Credit cards
How would potential lenders view someone who has many closed credit card accounts? Risky, or a safe bet? (I would assume a safe bet as I have a very good history with all the closed accounts)
Looking at my Experian report over the last 6 years, it lists 44 accounts, but currently, only 4 are active and the other 40 are listed as closed - whats happened is that I've opened card accounts for 0% deal then done the old credit card tarting routine, and then I always close the unused account or I've bought something on 0% at a store, but always clear it before the deal expires. I have green blobs everywhere, no late payments.
Looking at my Experian report over the last 6 years, it lists 44 accounts, but currently, only 4 are active and the other 40 are listed as closed - whats happened is that I've opened card accounts for 0% deal then done the old credit card tarting routine, and then I always close the unused account or I've bought something on 0% at a store, but always clear it before the deal expires. I have green blobs everywhere, no late payments.
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How would potential lenders view someone who has many closed credit card accounts? Risky, or a safe bet? (I would assume a safe bet as I have a very good history with all the closed accounts)
Looking at my Experian report over the last 6 years, it lists 44 accounts, but currently, only 4 are active and the other 40 are listed as closed - whats happened is that I've opened card accounts for 0% deal then done the old credit card tarting routine, and then I always close the unused account or I've bought something on 0% at a store, but always clear it before the deal expires. I have green blobs everywhere, no late payments.
Number of closed accounts with good payment history can only be a postive thing.
Demonstrates you've been able to manage multiple accounts without any issues.
Is one of the perverse reasons that stoozing and rate tarting actually help build a glowing credit report
EDIT: Also gives you ammunition for speaking to underwriters where you're able to point to your report and say "At one time I had X number of cards and a total of ££££ available credit over the years ....""A child of five could understand this. Fetch me a child of five." - Groucho Marx0 -
EDIT: Also gives you ammunition for speaking to underwriters where you're able to point to your report and say "At one time I had X number of cards and a total of ££££ available credit over the years ...."
Thanks CannyJock, I never thought of using my report to help my case with the Underwriters - I've been rejected by MBNA/Virgin, maybe I should have done just that.0 -
Thanks CannyJock, I never thought of using my report to help my case with the Underwriters - I've been rejected by MBNA/Virgin, maybe I should have done just that.
Always worth appealing - no extra searches on your report and a bit of jousting with underwriters is always good if you get a result Contrary to popular belief, they're not hell-spawn incarnate - but you do need to demonstrate a bit of financial common sense which an active credit report helps promote "A child of five could understand this. Fetch me a child of five." - Groucho Marx0 -
Hi Cannyjock,
I have a similar question regarding the topic. So when does closing an account be bad? Cause I've read before that closing an account especially the old ones has a big impact on our score.
As long as you close the account with good credit standing in them, that's a positive thing right?
Just got confused though..Mr. Mulla0 -
Closing an account could be a bad thing, as it increases your credit utilisation ratio e.g. £1,000 balance outstanding on £10,000 available credit gives a ratio of 10%. Close some accounts and, say, the total credit available then falls to £5,000, which means your ratio is now up to 20%. But the impact will depend on the specific measures each provider uses when making a credit assessment and the weightings allocated.0
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Closing an account could be a bad thing, as it increases your credit utilisation ratio e.g. £1,000 balance outstanding on £10,000 available credit gives a ratio of 10%. Close some accounts and, say, the total credit available then falls to £5,000, which means your ratio is now up to 20%. But the impact will depend on the specific measures each provider uses when making a credit assessment and the weightings allocated.
As a warning I am having this problem, as I pay off my cards they are reducing the credit limits which are having the adverse affect on my ratio. I have complained and they will not do anything.
I have not missed any payments and would love to apply for a 0% to transfer but there is not point when the score is so low and not helped by these credit card companies (MBNA being the worse).0 -
Hi Cannyjock,
I have a similar question regarding the topic. So when does closing an account be bad? Cause I've read before that closing an account especially the old ones has a big impact on our score.
As long as you close the account with good credit standing in them, that's a positive thing right?
Just got confused though..
No idea how your scoring system works in the US.
Length of time with an institution might be the factor you're talking about - over here it's only length of time a current account, not with a credit card.
To the other 2 replies, I'd say that % utilisation is one factor, but isn't in my experience the major one. % of income in credit/credit available is much more significant. I've tested this with stoozing over the years, where the whole point to stoozing is to max the card out on day 1. Typically get my cards up to 90-95% utilisation right away. Never been a problem getting credit, even in recent years post-crunch. Once my total credit gets up towards 75% of income then the limits offered start to reduce."A child of five could understand this. Fetch me a child of five." - Groucho Marx0 -
As a warning I am having this problem, as I pay off my cards they are reducing the credit limits which are having the adverse affect on my ratio. I have complained and they will not do anything.
I have not missed any payments and would love to apply for a 0% to transfer but there is not point when the score is so low and not helped by these credit card companies (MBNA being the worse).
The constantly reducing credit limit will have more of an affect on your credit scoring if you ask me. Ask yourself, what does it look like? I'd say it makes it look like the cards you currently have are concerned about offering you credit facilities.
How do you know your score is so low? History of missed payments or flurry of recent applications?"A child of five could understand this. Fetch me a child of five." - Groucho Marx0 -
Quite the opposite, history of always paying them off, long story but builder went under, I supported the house build on cards all at 0% as bank pulled plug on further funding due to lending criteria changes, more like that RBS were in the sh*t. These 0% cc ran out so I am now paying them back with interest, struggling to remortgage becuase of the CC debt so having looked at my credit score which is 'very poor' all green and fine just the amount of debt used 89%. This has actually gone up as I have paid chunks off.
I had so much credit available because I paid it off so they kept raising it. Just stuck in the rut now paying off on high interest and having never had to do it before so not happy.0 -
I had so much credit available because I paid it off so they kept raising it. Just stuck in the rut now paying off on high interest and having never had to do it before so not happy.
What sort of % you looking at on credit to income?
No option to refinance the cards on an offset mortgage once the house is built or was the plan to do it all through 0% cards?"A child of five could understand this. Fetch me a child of five." - Groucho Marx0
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