Closing Credit Cards

DarrenJFOX

Hi All,

After some advice.

I have a sparkling credit score/report, but my concern is I have £15,600 of available credit. This is across 3 credit cards one of them has a £9k credit limit!

I will be applying for a mortgage within the next 10 months and hear a mixture of opinions to whether this large amount of credit not being used could affect my need for borrowing/credit report.

Should I close down the two cards with the smaller amount and leave the £9k card as it is just sitting there, not being used? As its nice to know I have some credit should I need it.

I dont want to damage my credit report by suddenly closing two cards I've had for a very long time!?

Some say, you shouldnt close old cards, some say the more credit you have open less likley lenders are to lend you.

To be clear again, I dont need any of the credit and have NO DEBT on any card.

Please let me know your thoughts! What should I do?

Thanks.

Tixy

The differing opinions you see are in part because different potential lenders will consider these factors differently, and so its always a bit of guesswork as to how they will view your particular circumstances.

If it were me I would close down 1 and reduce the limits on the other 2 to something like £5k between them.
If the accounts have been open differing lengths of time then it might be a good idea to keep the older ones open.

You are not currently using these cards at all. Are you currently using any credit at all? overdraft? loans?

If you currently use nothing then it might be worth putting some of your normal monthly spending on one of the cards and then setting up a DD to pay in full the following month. That helps you keep an active credit history on file.

DarrenJFOX

I pay for:

- Credit report each month
- Spotify

Neither obviously touch credit report.

I have no direct debits setup at present.

However, I was in 18k debt across these cards and others up until 6/7 months ago, so spending on cards makes me feel sick!...

I wonder if this is enough to satisfy the fact that i can borrow and pay back, and am credit worthy, however over a year would have passed by the time im applying for mortage credit, so to apply what you saying and spend and pay back to keep things active might be appriorate.

I have never had a missed payment as I've been fortunate to have good paying jobs but it took a while to clear down the debt!

With the above in mind are you still of the same opinion? On my credit record I have a history of 21 accounts probably 15 of them were loans/card that had debt that was paid off over cuase of a few years so credit worthiness should be clear to any lender!! (i hope!!!)

hmmms.

Tixy

I think I would still consider putting some spending on them - but only providing you are sure you will keep control of them and pay them off every month. If you don't think you will be disciplined enough to do that and think that balances might start to build up then its certainly not worth it despite the possible benefit to your credit rating.

I assume none of your cards have rewards or cashback for spending on them?

DarrenJFOX

So if i just down the cards that have a few thousand on them and keep the 9k card alive, and then lower the limit to say £4k, you think this activity wont have any effect on lending within the next 10 months?... my concern might be some lender sees suddenly a closure of cards and then a slash of 40% on the 9k limit, could interpret the wrong way, and we all know its not easy to justify, system says yes or no. Or i can just leave it. You agree with this idea?

The good news is im in complete control of my finances now and have healthy savings balance, so the principle of what you suggest can work, and i appreciate your comments. I just want to be sure that any action to better the reflection of the report does not actually owrsen it as my perception of the banks systems are they are very sensitive to these changes and they could be mis-interpreted as banks cutting my limit etc due to a risk! :] Im paranoid! ....

Let me know thanks.