Cancel unused overdraft?

t0m.b

I am saving for a deposit for a house (hopefully for next summer) and am looking to improve my credit rating. I last checked my credit report a couple of years ago and had green ticks across the board but when I applied for a loan around the same time I was offered an interest rate north of 20%. I figure this is most likely because I had another loan at the time, used my overdraft every month and had old, unused credit cards. I have cancelled as much as possible and cut back on expenses so here is my current situation:

3 x current accounts (all jointly held with my wife, all with unused overdrafts)
1 x credit card (£7000 limit, used for all my spending, paid off in full by DirectDebit each month)
1 x loan (£3300 outstanding balance, will be paid off May 2014)

We had 2 current accounts (one each) but I recently opened a FirstDirect account to take advantage of the £100 switching offer. I was going to close my old account but I read on here that having an account with a long history is good.

My question is: is it a good idea to cancel/reduce the £1250 overdraft on my old account to reduce the amount of credit available to me?

My available credit is as follows: overdrafts total £2000 + credit card £7000 = £9000 (should I include the loan in this figure?). My salary is £37000.

Also: is it a good idea to leave a balance on the credit card once in a while so I pay some interest?

Many thanks in advance, and apologies if I have left out any details.

rabbit_burrow

When they look at your income they will only take actual debts into consideration rather than available credit to determine how much they are willing to lend you, however, they will look at your available credit when making an overall decision.

I would say that reducing your overdraft slightly may help. Having a long-term account helps as it shows stability.