What looks better... lots of available credit, or lots of settled accounts?

GSMAnon

Hi there,

Since I learned a few years ago that it makes good sense to build up a good credit history by taking out credit accounts and using them wisely, I've been doing just that.

In the past 2 years or so I've taken out a large overdraft and 3 separate credit cards with the intention of building up my available credit. Of course, I haven't been relying on them, I've been paying them off in full each month, occasionally paying only the minimum amount (during interest free periods, for example).

Anyway, the whole idea of this, I suppose, is to eventually make it easy for myself to get a mortgage at some point in the next 18 to 30 months.

So my question is this: is it better to have a lot of available credit and a small proportion of it being used, or to have a lot of accounts which I have closed and settled successfully with no missed payments, come mortgage application time?

Tixy

Subjective, but I would say that it is better to have not too much available credit.
Better to have a moderate amount of available credit and almost none of it being used and to have a combination of settled accounts and open accounts.

GSMAnon

Tixy wrote: »

Subjective, but I would say that it is better to have not too much available credit.
Better to have a moderate amount of available credit and almost none of it being used and to have a combination of settled accounts and open accounts.

Okay, I see.

Well, I don't have "too much". I am a PhD student at the moment, so it's quite a lot of available credit given my circumstances, but not a whole lot in general, I think (3 credit cards + 1 interest free overdraft adding to ~£6.7k).

I do already have a settled account for a car finance loan that I took out and then paid off just 2 months into it and a few settled accounts for mobile phone contracts, etc, but I take it they don't really count.

Tixy

I'd say not too much available credit compared to your income (at the time you apply for a mortgage), as well as not too much as a £ amount.