Cancel credit card or keep open? Whats best for credit score?

Summer69

Hi,

I am currently working on paying off my credit cards and saving for my first home. I have just paid off a credit card and was going to cancel the card but was wondering what would be best for my credit rating when it comes to applying for a mortgage? I have a good limit on the card. Is it best to have a big limit available that is unused rather than cancel the card? Or does it not make that much of a difference?

Thanks

[Deleted User]

Depends how many other cards you have, which one you are using regularly, the size of the limits compared to your income and whether you need further credit in the near future.

InsideInsurance

Searching is, the question is asked several times a week and the answer remains the same.

There is no right answer, it depends on both the prospective lender and your circumstances

anthonyj238

I was told you are only allocated so much credit, maybe it reflects salary. I am no expert but i did reduce my credit limit on many things for instance had 5k on next account but only had £150 on it which was a regular amount never went over 200. So reduced that and others. I could be wrong

Experian_company_representative

Hi Summer69,

It is always a bit of a balancing act in regard to the amount of credit you have available when you make an application.

If you have a lot of available credit lenders may be concerned that you could become over-committed if you were to use it all. If you have very little credit then lenders may not have enough history to base their decision, or think your current lenders don't feel comfortable offering credit.

As ZX81 and Insideinsurance have said, it will depend on what other accounts you have on your report and other factors such as income as what is the best action to take.

Our Ask James page covers this question in more detail here.

Kind Regards
Neil

Summer69

Experian_company_representative wrote: »

Hi Summer69,

It is always a bit of a balancing act in regard to the amount of credit you have available when you make an application.

If you have a lot of available credit lenders may be concerned that you could become over-committed if you were to use it all. If you have very little credit then lenders may not have enough history to base their decision, or think your current lenders don't feel comfortable offering credit.

As ZX81 and Insideinsurance have said, it will depend on what other accounts you have on your report and other factors such as income as what is the best action to take.

Our Ask James page covers this question in more detail here.

Kind Regards
Neil

Great, thank you for your help