Close unused CC's or not?

breakingbad

Got an agreement in principle from Nationwide, but now I'm worried that my unsecured debt and access to substantial credit may cause them to reject us.

Should I:

a) leave my 2 unused cards and unused overdraft open, leaving credit utilisation is ~25%

b) close the unused card accounts and the unused overdraft, meaning my credit utilisation will be ~70%

Which is likely to give us the best chance? Or are there more suitable lenders out there?

Thanks

Thrugelmir

Common sense answer is to only have open credit facilities that you actually need access to. If you have no requirement for a facility then close the account. Makes life easier in general when it comes to any future financial application.

breakingbad

Thanks, so decreasing my available credit (and thus increasing my credit utilisation) won't generally have a negative impact on my credit score/likelihood to be accepted?

pjread

garmcqui wrote: »

Thanks, so decreasing my available credit (and thus increasing my credit utilisation) won't generally have a negative impact on my credit score/likelihood to be accepted?

Best answer you'll likely get is "it depends on the lender".

kingstreet

Nationwide takes no notice of available credit and if it did, the point that would have been an issue was when you applied for the decision in principle.

Other than affordability, Nationwide's issue with credit is that total used credit does not exceed (IIRC) 50% of earnings.

breakingbad

Ok, that's helpful - thank you!

Do car lease payments count as "credit used"?

What about Natwest - how are they in comparison?

Thanks

Wh05apk

garmcqui wrote: »

Ok, that's helpful - thank you!

Do car lease payments count as "credit used"?

What about Natwest - how are they in comparison?

Thanks

It's not really about "credit used" but monthly commitments, if you are paying £500 for car finance, that's £500 you can't pat towards a mortgage, so typically that could mean a £30,000 smaller maximum mortgage.

breakingbad

Thanks...so if they look at my bank statements and see that I'm currently paying almost £700 towards credit cards each month, will they understand that this is completely voluntary (minimum payments are only approx £100)? I don't want my debt-clearing actions to perversely portray me in a more negative light...

Wh05apk

Depending on the lender, if the credit card balance is to be retained, they will normally use a figure of 3-5% of the balance as a monthly commitment.