Paying off credit cards - credit report/score questions

picklednut

We are currently in the position to be able to pay off our two credit cards in full this month in one big lump sum. We currently have really high limits on them as well (10k available on each). We're thinking of reducing the credit limits to around £3k to avoid the temptation of running them back up again.

A couple of questions:

1) how does it affect your credit rating when you pay off CCs in full (I'm talking quite a few thousand that have been on the cards for a lot of years)
2) will reducing our credit limits on the cards have a positive / negative effect on our credit score/rating if we applied for future credit?
3) how long does it take to show up on our credit reports that the credit card balances have been paid off in full?

My OH is thinking of leasing a van for his self owned business and we're wondering how long we need to wait before he can apply? We're obviously presuming because we won't have any outstanding loans or credit card balances it should be easy to pass the credit check? We don't have any defaults or CCJ or any other errors / problems on our credit file.

Thanks in advance

Tixy

1) after the repayment has been reflected on your credit file (a month or so later) then it should likely increase your chance of being accepted for further credit if you applied for it.

2) it could have a positive or negative effect on your ability to get new credit. It depends on your circumstances and different potential lenders have different preferences. As a guide lenders don't like to see someone who utilises a high % of their available credit, but equally having large unused credit limits means some lenders will factor those in to any potential affordability calcs.

3) probably around a month, shouldn't be longer than 6weeks (depends on the timing of your payments and the timing of the monthly update from each bank to the credit reference agencies)