Closing credit cards in preparation for mortgage

ixxi212

I currently have 3 credit cards all with about £5000 credit, and all paid off. My partner has 2, same situation. I was going to close the two I don’t use in preparation for a mortgage as I have read that banks are nervous to lend if you have lots of available credit but I have also read that closing a card and reducing your available credit, lowers your credit score. Can someone tell me what the best plan of action would be. To close or not to close?

swgl

ixxi212 wrote: »

I have also read that closing a card and reducing your available credit, lowers your credit score.

I've never heard of that. Perhaps if it's your only card. Or if you have a balance on the card and you lower the limit, it will affect your credit utilization ratio. But if you don't have any debt and close one or two of the cards, I don't see why your credit rating would drop.

If you do want to close two, perhaps keep your oldest card? As length of history matters.

kingstreet

The only lender with a genuine problem with unused available credit is Yorkshire Building Society Group.

In 30 years, I've never known a problem with this in the market as a whole.

Thrugelmir

Available credit lines impacts the unsecured lending market more than the secured. Increasingly credit card companies and HP finance houses use benchmarks such as 4 lines of credit, 50% of gross salary, whether a customer constantly transfers balances.

The honest answer is to have as much open credit facility as you actually need and use. Days of having 15 cards and £60k of facility to impress your friends are over.