Available credit impact

Malky

What impact, if any, does available credit have on your credit file? Over two credit cards and two overdrafts, I have £10900 of very rarely used credit. Is it worth ditching one card and one overdraft?

The_Boss

Malky wrote: »

What impact, if any, does available credit have on your credit file? Over two credit cards and two overdrafts, I have £10900 of very rarely used credit. Is it worth ditching one card and one overdraft?

Credit file in the eyes of Experian, Equifax etc or in the eyes of lenders?

Malky

The_Boss wrote: »

Credit file in the eyes of Experian, Equifax etc or in the eyes of lenders?

Should have made myself more clear. I was meaning lenders.

MoneySaverLog

It's a good idea to have 2 cards, one visa and one mastercard in case either visa or mastercard go down.

If I was a creditor, and I can only guess here with what their lending system would score, I'd look at available credit to salary. So yes having an available credit may affect your ability to get further credit.

Never used to be like that, changed after the credit crunch I guess.

The_Boss

Malky wrote: »

Should have made myself more clear. I was meaning lenders.

Nobody know for sure because as well as depending on the lender it also depends on the financial product. For a credit card or loan, the amount of available credit is a more important factor than when applying for a mortgage for example.

Having available credit can be good as well as bad. Take a read of the thread below :

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

MoneySaverLog

I agree with the availability of credit having a positive effect on the credit score.

I can also understand why closing a number of credit cards in a short space of time could have a negative effect on your credit score too.

There is probably a limit to annual salary in terms of available credit where this is favorable.

There is also probably some limit on use of available credit to annual salary that they look at too.

A long established card with a high limit is going to look good on your file, open or closed, given if it is/was managed well.

datlex

I personally suspect it is a balance between the amount of your available credit and how much of it you use in relation to your wages.