Credit Card paid off (finally) should I cancel?

Debtfree147

Hello everyone,

A little bit of info before I post my question. My goal is to get a mortgage within the next 12 months so I'm hoping everything I do will have a positive impact on my credit rating:

In the last 3 years I have gone from

3 x credit cards (all maxed out)
1 x HP for a car
1 x loan
1 x large overdraft
1 x catalogue

To

1 x Loan (should be finished within 12 months)
1 x Credit card with a zero balance as of yesterday
1 x very small overdraft (not being used)

I've closed my other credit accounts when the balance was clear but I'm not sure what to do with the card I cleared yesterday?

My original thinking was to close the account as I thought this would look better but a friend has suggested I leave it open... He said that having available credit (keeping balance to zero) is actually better?

I'd be very grateful for any advice.

Thanks 😃

The_Boss

What is your salary. What is the credit card's limit? How much is the overdraft limit? How much outstanding on the loan?

Good that you're prepping now in advance of your mortgage - suggest you check your £2 statutory reports with Experian and Equifax too - the latter is free until tomorrow via an online link. Will bump the post so you can see.

longtermplanner

Great progress!

I would say leave it open, use it every month (even if it just for 1 grocery shop or for buying petrol) and pay it off in full every month. Set this full payment up by direct debt so there is no chance you can be late making it.

This way you get 12 months worth of nice neat ticks on your credit file.

The mortgage lending rules are just changed so there is more emphasis on affordability and less on simple multiples. Having credit available and never using it is a great way to prove that your current affairs are easily affordable for you.

The_Boss

Yes, that generally is a good idea - not committing to a response until the OP has come back with some responses though

Imbroglio

Just wanted to say a quick well done on dealing with your debts! I'm really looking forward to being in your position

Debtfree147

Salary is currently £30,000
Credit Card limit is £1000
Overdraft is £200
Loan balance is £3000 but will be overpaid and closed by Christmas (barring any disasters)

Thank you all for taking the time to help

The_Boss

Definitely keep it and repay. I'd argue that getting one more card would also be of benefit as long as you stick to the repayment terms.

Butti

This all looks good to me. As others have said use the credit card each month and set up a direct debit to fully pay off.
There is starting to be pressure on prices. Help to buy is increasing demand without a corresponding increase in supply. The change in retirement annuities in April 2015 will enable some wealthier pensio.ers to get buy to lets rather than annuities. Without wanti.g to panic you I would buy sooner rather than later.