Credit score - which card to close?

Lacey6789

Hello,



I'm a long-time lurker on MSE but this is my first post…

I have just checked my credit score on Experian and it comes out at 984 out of 999 which is good. The only point counting against me is that I have "no settled non-mail order credit accounts".



I have two credit cards which I pay off in full each month.


The first is with my normal bank which I has an available credit of up to 1500 which I have had for more than 6 years.



I have a second credit card which I use for purchases abroad – which is used frequently as I travel with work/holidays often. This has an available credit of 5200 and which I have had for 10 months.



So my question is which one should I close to ensure I have a "settled non-mail order credit account"?



Part of me thinks the first one as the second has a larger available credit and is useful abroad. But the other part says the second one as the long history of the first card is good.



Any ideas?



I currently also have a graduate account with an interest free over draft I no longer use. If I close this will it count as a "settled non-mail order credit account" or not?



Thanks for your help :-)


p.s. I should say I'm not looking to apply for a loan or card any time soon – I was simply hoping to apply for a mortgage in about a year's time and was just checking my credit score no so I could fix any issues in advance.

shortcrust

I don't think you need to close anything. Experian need to give you a negative so you'll get all hooked on improving your score and using their service, but not having a closed account isn't going to be negative when you come to get a mortgage. Just leave things as they are.

Lacey6789

Hmmm that does sound like something they'd do...

But still surely it's worth trying to get the best possible score to maximise my chances?

Anthorn

If trying to improve your credit history, what will help you is a loan account which will also look good when settled. It held me back for a nearly a year because I couldn't get a loan but I finally found one at my local credit union. If trying a credit union make sure they report to a CRA - just ask them.


Otherwise, credit scoring exists but at the lenders and different lenders have different criteria. As shortcrust says, it's just a way of selling you something and keep you buying.

bsms1147

Ignore the number, noone sees it but you. If the information is correct and there are no nasties (defaults etc) that's all that matters.

Lacey6789

Thanks for the advice guys.

@ Anthorn - my credit history is almost perfect - no late payments or defaults ever, so paying interest on a loan I have absolutely no need for seems like a really odd thing to do? Unless I have missed something?

@ bsms1147 - It is not the number I'm so concerned about, more the fact that I didn't tick one of their criteria - a criteria which I could easily fulfil by closing one of the cards. As I don't need both, I was just looking for advice on which one it made most sense to close.

bsms1147

Lacey6789 wrote: »

Thanks for the advice guys.

@ Anthorn - my credit history is almost perfect - no late payments or defaults ever, so paying interest on a loan I have absolutely no need for seems like a really odd thing to do? Unless I have missed something?

Anthorn always seems to have a misguided belief that there's some merit in paying interest on credit, even when you don't need to.

@ bsms1147 - It is not the number I'm so concerned about, more the fact that I didn't tick one of their criteria - a criteria which I could easily fulfil by closing one of the cards. As I don't need both, I was just looking for advice on which one it made most sense to close.

Two ongoing credit card products, with the ensuing green ticks each month, may look better than one. If you close one account you'll only have the one ongoing account. That could equally be seen as a negative to a lender. There's no right answer, and I personally wouldn't try to jump through what I feel is an unnecessary hoop, just because Experian thought it might be a good idea.

Mr_Goodkat

Ignore Experian scores!


It is the content of your credit report rather than a number that matters and it sounds like you are steadily building a strong credit profile.


You don't need a settled non mail order credit agreement on your credit history to get a mortgage.


An unutilised overdraft on a current account and two credit cards paid in full whenever used are all positives as is having a credit card with a provider for over six years.


Mortgage providers are looking for stable and long term money management and you are proving that already - it can be difficult to get credit if you have no history of repaying it which is a bit of a catch 22 but you have no need to worry and actually closing an account could diminish from your overall profile so stick with that you have.


As well as maintaining a stable credit file having bank accounts and credit cards with different institutions is sensible especially when travelling abroad etc as you won't be caught out if there are issues with a particular bank, card issuer, card network etc.


I always have on me - 3 different debit cards with three different banks and at least one Amex, MasterCard and Visa card issued by different providers.

Lacey6789

Thanks for the advice everyone. Looks like I'll be leaving them both open.

Does anyone know if closing the account with the 1500 interest free over draft will count as a "settled non-mail order credit account"?

bigadaj

Lacey6789 wrote: »

Thanks for the advice everyone. Looks like I'll be leaving them both open.

Does anyone know if closing the account with the 1500 interest free over draft will count as a "settled non-mail order credit account"?

Read the post below yours and ignore experian advice and scores.

They supply information to lenders, which provides part of their income, and try and sell their 'inside knowledge' to gullible consumers, which provides some more.

A settled non mail order credit account might be one pointer towards a reliable borrower, but there are many other factors, and so long as you tick most of the boxes the lack of one or two doesn't matter.

We've seen plenty of examples on these boards of people with 999 credit ratings who have been bankrupt, with a car crash credit record, ccjs etc so don't worry about it.

Anthorn

Lacey6789 wrote: »

Thanks for the advice guys.

@ Anthorn - my credit history is almost perfect - no late payments or defaults ever, so paying interest on a loan I have absolutely no need for seems like a really odd thing to do? Unless I have missed something? .

You're looking at your credit history in the wrong way. Who say's it's almost perfect? You? In that case you must be loaning yourself the money or have your own credit card company and supplying yourself with a card.


It's not you or some CRA selling you a worthless credit score that matters. It's the lender viewing your credit history that matters and since most lenders are different from each other we try to have on our credit history a variety of different credit types. A lender which likes credit cards or a lender who likes loans or a lender that likes a mobile phone contract etc. etc. should all be covered. A credit history which doesn't have a settled loan however small, doesn't cut it.


Neither am I advocating paying interest or at least not very much interest. A loan which is settled however soon after opening it counts if it's on the credit history!



I'd say continue as you want and it has actually been a wasted exercise asking for advice. Follow the crowd and when you fail come back to this post and read it again.