Credit Cards vs Mortgage

PawelK

Hello.

I am a first time buyer and considering purchasing a property next year. My question is about how credit cards imfluence your credit score. Can I generally assume that any account that is not used, negatively affect my score? Or perhaps, if an account I am using has a small limit but another, dormant account much higher limit, it could improve my score? And now on my example.

I had two Santander credit cards, one of them not used in the last twelve months so I closed it recently. Another one is just for current outgoings such as grocery etc. to create a credit history. One more is in halifax that I opened a year ago to repay my annual travelcard and tomorrow will be my final payment clearing the balance. Since I dont intend to use that credit card anymore, I am thinking of closing it down but because its limit is mire than twice of my santander account, maybe I should keep it, if its interest free and doesnt negatively impact on my credit score?

Thanks.

Pawel

Nebulous2

When you get a mortgage, the company you get it from will look at your credit history and decide whether to lend to you. It's hard for any of us to know what will influence that.

From a practical viewpoint though, it is a good idea to have two cards. If there is an issue with one account or card you have a spare. The interest rate doesn't matter if you dont use it or use it but pay it off in full every month.

I would keep it and not worry about my score if I was you.

MEM62

PawelK wrote: »

Hello.

I am a first time buyer and considering purchasing a property next year. My question is about how credit cards imfluence your credit score. Can I generally assume that any account that is not used, negatively affect my score? Or perhaps, if an account I am using has a small limit but another, dormant account much higher limit, it could improve my score? And now on my example.
It's irrelevant as your 'score' is a randomly generated number. It is the data on your credit report that lenders look at. Lenders will want to see a history of responsible use of credit. From an affordability viewpoint any large outstanding balances may impact on what they will lend.

I had two Santander credit cards, one of them not used in the last twelve months so I closed it recently. Another one is just for current outgoings such as grocery etc. to create a credit history. One more is in halifax that I opened a year ago to repay my annual travelcard and tomorrow will be my final payment clearing the balance. Since I dont intend to use that credit card anymore, I am thinking of closing it down but because its limit is mire than twice of my santander account, maybe I should keep it, if its interest free and doesnt negatively impact on my credit score?
Either way this will not have a major impact on your mortgage application.

Thanks.

Pawel

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