Can having too much "available credit" affect your credit rating?

MrsKrepsly

I currently have a barclaycard platinum with £6k available credit on it (but zero balance). I also have a Next account with £5k available credit on it (but again with zero balance). I also have a Natwest credit card with £500 available (zero balance), an available overdraft of £200 and an argos store card with £360 available (zero balance). Altogether this amounts to £12060 available credit to someone who is only earning £21k a year. Now, if I was to apply for a mortgage for instance, would this look bad to potential lenders?

I like the barclaycard but I could quite easily shut the Next account and not lose any sleep over it. Could also shut the daft netwest card but it's attached to my current account so is that a bad idea?

20aday

Someone else from this Forum will give you a far better reply than a novice like me but from what I've read on these boards over the past few years I'd say the amount of "available" credit would mean any potential lender would wonder why you are opening another line of finance when you have so much "available" to you. (I stand corrected if this doesn't apply to mortgages, and apologise in advance.)

Which of the above cards have you held the longest? The longer an account is open (and well maintained) the better it'll look on your files when the time comes to apply for a mortgage.

If I were in your position I'd ditch the Next credit account and also the Argos Card... do you ever fall into your Overdraft? Or is it there "just in case?"

Personally I'd keep the NatWest credit card as an emergency backup...

[Deleted User]

I'd agree. Lose the Next Account. No one needs that many handbags.

Keep BC and NW.

InsideInsurance

MrsKrepsly wrote: »

I currently have a barclaycard platinum with £6k available credit on it (but zero balance). I also have a Next account with £5k available credit on it (but again with zero balance). I also have a Natwest credit card with £500 available (zero balance), an available overdraft of £200 and an argos store card with £360 available (zero balance). Altogether this amounts to £12060 available credit to someone who is only earning £21k a year. Now, if I was to apply for a mortgage for instance, would this look bad to potential lenders?

I like the barclaycard but I could quite easily shut the Next account and not lose any sleep over it. Could also shut the daft netwest card but it's attached to my current account so is that a bad idea?

When applying for credit the lenders look at how much extra could you afford if you maxed out all your existing lines of credit. If you have a very big income then having big available credit isnt a problem because the answer is yes, you could afford it. For those us normal mortals then we need to be more careful


As always these things are a balancing act as big individual limits are a sign that other lenders do trust you which gives lenders some comfort. If your debts were more evenly spread then the argument would be to close all the small accounts but in this case your Next account is the prime candidate if you want to close something