Another CRAs !!!!!!!! ....

adindas

I called my credit card company a few minutes ago because I want to a few grands decrease in Credit Limit of the credit card that I hardly used

I was told by the Customer Service that it might impact my Credit Rating as this will be recorded in the credit file.

The reason why I want to decrease my credit limit is that I want to apply a new current A/C which offer "an interest free overdraft for one year" so for stoozing purposes actually. Here I am talking about the credit card that I hardly use but I do not want to close it. I want to reduce to make sure that when affordability checked is done I will not be seen to be exposed to too many credits.

IMHO someone who wants to reduce credit limit should look better but this "idiot and unfair system" might consider it otherwise. I mention it unfair as CRAs system have always skewed to the lenders although they also make a lot of money from the borrowers.

What advise could you give for a people who want to reduce credit limit but do not want to have negative impact on their credit file.

Thanks

The_Boss

adindas wrote: »

What advise could you give for a people who want to reduce credit limit but do not want to have negative impact on their credit file.

Thanks

Don't do it. I reduced my limits/cancelled several cards 7-8 years ago and it wrecked my ability to get credit for 2 years. The link to the thread is beliw :

https://forums.moneysavingexpert.com/discussion/175234

alanq

The_Boss wrote: »

Don't do it. I reduced my limits/cancelled several cards 7-8 years ago and it wrecked my ability to get credit for 2 years. Sadly the thread I posted is gone now.

The Forum Search finds older posts than clicking on Find More Post By...

Is this the one that you are referring to?
https://forums.moneysavingexpert.com/discussion/84963

The_Boss

alanq wrote: »

The Forum Search finds older posts than clicking on Find More Post By...

Is this the one that you are referring to?
https://forums.moneysavingexpert.com/discussion/84963

This one...(and I have now updated my post above).

https://forums.moneysavingexpert.com/discussion/175234

Hazzinho

If you barely use a card close it rather than reduce a limit, current debt concerns lenders more than credit limits.

The_Boss

Hazzinho wrote: »

If you barely use a card close it rather than reduce a limit, current debt concerns lenders more than credit limits.

Did you look at the link in the post above?

adindas

Hazzinho wrote: »

If you barely use a card close it rather than reduce a limit, current debt concerns lenders more than credit limits.

Thanks for taking time answering my queries. But it is actually not what I am asking as I have mentioned clearly that I want to keep my old credit cards. What I want to know is that how to reduce credit limit without having negative impact on my credit rating.

Because it seems to me you do not understand the game of some people here including me are playing by keeping the hardly used credit cards open; it is better if I explain it.

As long as no underfunding fees applied, keeping the old Credit Cards offer benefits.

1. Long standing "clean" records of holding credit card from renown high street banks will definitely a good thing of keeping good credit history.

2. I have been using my credit cards that I hardly use to harvest switching incentive from various bank accounts, to earn very good interest rate of around 4% in current account, to get very low interest mortgage. Some current ACs are offering switching incentive but they will require the switching of at least 2 No of Direct Debit. Similarly if you want to get a high interest of bank ACs. DDs from Credit Card are the best to serve this purpose as it is entirely within your control when you want to spend it.

Probably you do not believe, I know from reading their various postings that there are quite reasonable number of people here in this forum have more than five or even more than ten bank a/c. I am also in this categories. Here we are taking advantage of switching DDs from CC, to meet the minimum number of DD required to harvest incentive or to gain high interest rate.

rartherinv

Well that's just one school of thought - surprised they told you this as gospel when the consensus seems to be that it is normally a good thing to shave your limits down a bit.

From the 'negative affect on credit' school of thought, having a number of accounts with low limits might seem to a prospective lender that no one else trusts you with a decent limit. The lender cannot see from your report who the accounts are held with, they will only see Credit Card Account with £200 limit and payment info, so they may just assume the applicant has a bunch of subprime accounts from the tiny limits?

If it is not the case that the borrower with low limits is subprime, it may be the case that they are someone like you who does not actually want to borrow money and keeps their limits low on purpose to reap the benefits of each card... not a profitable customer for them. Either way there may be question marks about why you don't have any decent limits, and question marks = risk.

sfax

It's not a simple case of it will always impact your credit score negatively. I've reduced limits in the past to facilitate better limits on new cards. In fact, you may have to in some circumstances like when your total available limit is too high in proportion to your income.

Consider the debt/limit ratio before and after. If you are moving from a ratio of 40% to 80% by reducing a limit, that will almost certainly negatively impact your score. On the other hand, a change of 10% to 30% could be seen as a positive move.

Having unused cards with £0 balance is worse for your score than having cards that are used occasionally and paid on time.

anqet

sfax wrote: »

Having unused cards with £0 balance is worse for your score than having cards that are used occasionally and paid on time.

I hope you are not saying that paying CCs in full every month hurts your score and you're better off carrying a balance and paying interest on it.

stephane_2

anqet wrote: »

I hope you are not saying that paying CCs in full every month hurts your score and you're better off carrying a balance and paying interest on it.

That's a complete different matter....a card which is never used will show £0 month in month out....as a card which is paid in full every month will still show the balance from the previous month so showing that it is being used.