Broker recommended I lower my credit limit

chelseablue

Spoke to a broker this week and got a DIP.


He recommend to increase further the chances of being accepted I lower the credit limits on my 2 credit cards, as the lender will see I have a lot of available credit.

I have 2 credit cards, one with Barclaycard, the other Halifax.

Both have credit limits of £7,000, I don't owe anything on either.

What should I drop them down to??

kingstreet

No idea. I've never recommended such action to anyone.

ACG

Neither have I.

Some lenders would rather see you with higher limits and no (or minimal) useage.

I suppose if your income is £15k and you have £14k available on credit cards then some underwriters may get a bit twitchy at certain lenders. For instance when I worked for Co-op I am not sure they would have been a huge fan of that.

dunstonh

I havent done mortgages for a very long time. However, back in the days I did, I have seen the availability of large credit held as a negative. In that case, the requirement stipulated as a condition of borrowing was to close the extra credit cards. Also, in my younger days when I would assess mortgage borrowing, availability of large credit was seen as a potential negative. It was mainly the amount of credit relative to income and how close to the maximum you would typically lend that person.

However, that was many years ago and it rarely popped its head up. Whether it still applies I dont know.

psilvester

chelseablue wrote: »

Spoke to a broker this week and got a DIP.


He recommend to increase further the chances of being accepted I lower the credit limits on my 2 credit cards, as the lender will see I have a lot of available credit.

I have 2 credit cards, one with Barclaycard, the other Halifax.

Both have credit limits of £7,000, I don't owe anything on either.

What should I drop them down to??

Personally I would keep one for emergencies (new boiler etc) and close the other.

chelseablue

My income is £30,000


If they looked into both cards they would see I've never been up to the limits, I think the highest the balance has ever been is about £1,500.


My DIP is with Halifax, so not sure if it's best to close the Halifax card or keep that one open.

dunstonh

If they looked into both cards they would see I've never been up to the limits, I think the highest the balance has ever been is about £1,500.

It wasnt what you have done. It is what you can do. You could borrow nearly 50% of your annual income on the cards. the amount is far too high for someone on 30k.

chelseablue

Very true. Would you suggest I close one of them? Plus lower the limit on the other

Wh05apk

If you already have a dip, I wouldn't do anything, unless you want to.

chopper78

Lowering your limit will take an ice age to show up on your credit reports anyway.

My approved mortgage is with Halifax and I have available credit coming up to 50% of my salary, and no problems there. If they had concerns, I expect it is more likely they would make it a condition of mortgage than an outright refusal. Once you pass the affordability tests, then it would take adverse credit reports (CCJs, defaults, bankruptcy, etc) to hold you back.

Mortgage_Mark_2

chelseablue wrote: »

My income is £30,000


If they looked into both cards they would see I've never been up to the limits, I think the highest the balance has ever been is about £1,500.


My DIP is with Halifax, so not sure if it's best to close the Halifax card or keep that one open.

Halifax do not ask for credit limit at DIP stage, only balance.

In fact, they don't ask at full app either.

Your broker is talking twaddle.