Applying in next 12ish months, close credit cards or not?

immoral_angeluk

Hi all.
It's been a long time since I had any involvement with mortgage lenders so I wanted to ask those most knowledgeable before I do anything.
I've just paid off all my debts. I now have 3 open but nil balance credit card accounts, a Barclaycard with 9k limit, a nationwide card with 4k limit and Halifax card with 2k limit.
I have no intention of ever having debt again bar a mortgage, so I was planning on closing them. However I seem to remember that it may look better to lenders to have an account open with no balance? My credit history is fine and I've always paid extra, paid lump sums and have no late payments/defaults etc.

My partner and I are currently saving the deposit with a vie to go ahead once we've raised enough (12ish months?) He would be the main mortgagee as I'm disabled and not in work for the foreseeable future.


As I say, it's been a fair while since I've even thought about it! Thanks in advance!

audigex

For the most part it's the balance that matters, and the total debt - although if you have several Credit Cards they may question why.

Most people have a Credit Card, and having it in existence with a low or 0 balance is very unlikely to count against you

immoral_angeluk

Would they question me not having any credit facilities at all? Or would they just look at past credit history and go with that?

stator

Personally I would close one of them and reduce the credit limit on the other two. Keep using them but paying the whole balance every month so you pay no interest. They want to see that you are a responsible borrower, not a debtfree saint.

Tarragondragon

I closed mine. Had a Barclaycard, MBNA and Tesco Card. cleared the balances and have just kept the Tesco card (useful for some extra clubcard points - put a DD on it to pay minimum IF I do spend anything on it).

I closed mine about 3 months before applying for my mortgage, it was more a safety thing than anything else. Figured there was no point having 3 cards that have had a year + of no balance on them laying around. Safety from me spending on them and from possible (but unlikely) fraud.

JimmyTheWig

Do you know who you are likely to get a mortgage with?
If so, and it is one of the banks that you have a card with, then I'd definitely say keep that card.
Back in the day I wanted a mortgage with egg. I needed over the salary multiple that they normally gave but because I had their credit card they reviewed and accepted the mortgage application. So I'd say a card with your mortgage provider may get you bonus points.

If not, I'd agree with some of what stator says and disagree with some.
I'd close the Halifax card and keep the two with the higher limits. Those limits say two things:
1. These banks trust you with a lot of their money
2. You don't abuse that trust

If you can trust yourself to be sensible then use one of the cards on a weekly (or so) basis. Just spend what you would otherwise have spent (e.g. supermarket shopping or petrol) and put the money to one side.
When the bill comes in pay it in full on time with the money that you've put aside. Many people like to pay by direct debit to make sure this happens.

immoral_angeluk

Not sure yet although my main bank is with Barclays. However for some reason they've never liked me despite previous good income/history and ended up rejected and having to appeal. Went in to see a manager and investigate it but they couldn't work it out either. Weirdly they think that it's still linking me to my ex husband who had awful debt problems, even though we're disassociated and they manually removed the links from my account (which used to be our joint account!).

kingstreet

Unless you plan to apply to YBS Group which seems to be as anal as it gets, 99.9% of the lending market is happy for you to have unused lines of credit and trusts you to not run them all up to the maximum five minutes after you are granted a mortgage.

Again, the level of micro-management supposed on here is not needed to get mortgage rates towards the top-end of the market.