Credit cards - that old chestnut!

ash2020

Hi all, I'm trying to improve my credit file, to apply for a mortgage. It's not too bad but the CCs are a bit of an issue.

I've got about £16,000, spread over 6 credit cards, which adds up to about 50% of my available credit. I've tried to get as much as poss on 0% deals. Question is, which is better for my credit file?

1. Move a couple of small balances and close 2 accounts. (this will make my percentage use look much higher but my available credit lower).

2. Keep all the available credit but spread it more evenly so that no single card is near the max.

Obviously, when you get a good 0% deal, you put as much on it as poss. which makes it appear near to the limit. Is this a bad move?

Thanks
Andrew

Bad_website

I would transfer the balance off the younger credit cards, and keep your older credit cards, as the credit cards you have had the longest add more to your credit rating, it shows you are more stable.

Thrugelmir

You may struggle to open new lines of credit. Suggest your priority task is to tackle the debt head on.

YorkshireBoy

Divulging your income would enable better advice to be given on what's best to do. That said...

The mortgage company will almost certainly deduct circa £5K* from your income (12 months of 3% minimums) before applying their lending multiples.

Where's the mortgage deposit coming from? Or will that be saved once the £16K debt is cleared? How long will that take?


* Less if you're paying much more than minimums, or if the mortgage is several years down the line.

_Andy_

How much deposit do you have saved up for the mortgage?

ash2020

Bad_website wrote: »

I would transfer the balance off the younger credit cards, and keep your older credit cards, as the credit cards you have had the longest add more to your credit rating, it shows you are more stable.

Thanks. I hadn't thought of it that way, it makes a lot of sense.

ash2020

Thrugelmir wrote: »

You may struggle to open new lines of credit. Suggest your priority task is to tackle the debt head on.

Thanks, that wasn't the question. The debt is manageable, I just want to know which impacts less.

ash2020

YorkshireBoy wrote: »

Divulging your income would enable better advice to be given on what's best to do. That said...

The mortgage company will almost certainly deduct circa £5K* from your income (12 months of 3% minimums) before applying their lending multiples.

Where's the mortgage deposit coming from? Or will that be saved once the £16K debt is cleared? How long will that take?


* Less if you're paying much more than minimums, or if the mortgage is several years down the line.

Thanks for that. I didn't put in all the details because it's very complicated. It's a mixed commercial/domestic, buy to let, remortgage on a block of 4 properties I already own. I don't need a deposit and the 16K is to be cleared from mortgage funds.
I was really only asking which route is best, to close accounts and have a higher usage to limit ratio or keep a big limit and use less of it.
Thanks. BTW the mortgage is £250K so the 16K will get swallowed up easily.