Getting ready to apply for a loan...

bengutt

Hi all,


I'm preparing my finances in order to increase my chances of getting a home improvement loan towards the end of July.


I have a couple of First Direct accounts that I no longer use, I don't need to keep these open. Both of these have a £500 overdraft.


Also I have a Capital One card that looses it's cashback at the end of this month. I don't want to keep this card after the last cashback payment has been received in June.


Am I best to cancel the FD and Capital One accounts I do not use now or after I apply for the loan?


I worry that closing these accounts might look like the providers have closed them for me.


Thanks.

DCFC79

Is the capital one your only credit card ?

Whats the limit on it ?

Id keep it if its your only card but reduce the limit on it.

bengutt

The Capital One limit is £7,500.


I also have a Tesco card with a £12,200 limit. No idea why they put it so high. I've just cleared this card, it's balance transfer at 0% comes to an end in July but I cleared it early. I will be using it as one of my two primary cards.


I have another card, AMEX with a £6000 limit that I use where ever takes it.

DCFC79

bengutt wrote: »

The Capital One limit is £7,500.


I also have a Tesco card with a £12,200 limit. No idea why they put it so high. I've just cleared this card, it's balance transfer at 0% comes to an end in July but I cleared it early. I will be using it as one of my two primary cards.


I have another card, AMEX with a £6000 limit that I use where ever takes it.

With them limits you have available credit of nearly £26k, its all to do with your access to credit, if you were to get a mortgage tomorrow you could spend £20k on the cards and have problems repaying it.

Id close the capital one and lower the limits on at least the Tesco card. Someone more knowledgeable may post later with more advice.

bylromarha

I'd say keep the First Direct accounts open.

First Direct customers can get a 3.6% loan at the moment, up to £25k.

We applied for it via phone today - we get 28 days to take the money, ready for our home improvement work to start in August. We didn't know how long the 3.6% would be available, so didn't apply online as that gave you the money instantly.

bengutt

I've reduced down my AMEX card to £3000 and my Tesco card to £5000. I also cancelled to FD accounts as I'd not used them in over a year, and probably didn't qualify for any loan offer.


I have since found this (undated) article that seems to suggest to not close accounts as it's better to have a low utilisation of a higher credit limit.


I'm not allowed to post links but if you copy and paste this, CreditCards. com /credit-card-news/help/cancel-credit-card-6000.php, and remove the spaces you will find it.


Seems odd to me, and could be how I'm reading it.