Credit File Query

MWAUGH1983

Hi,

I was wondering about active credit cards and the taboo subject that if they are nil they can be a bad thing for your credit file.

If you have say £3,000 worth of credit cards say 2 or 3 with £1000 limits, 2 had nill balance and one was max to £1k limit, would this have a negative affect on your file?

If your file shows how much credit you have taken then surely its a good thing to have available credit ?

MWAUGH1983

Sorry I have now posted in correct thread for credit files.

chattychappy

Nobody really knows and no doubt it varies from lender to lender. Precise policies probably change to reflect lenders' experience.

I currently have 11 credit cards. I'm actively using 4 for purchases and have BT promo balances on 2 more.

My guess (and it just speculation) is that whether you are accepted depends more on your income as a proportion of existing debt. There is a logic that says if you have borrowed little, but have much credit available, then this is a bad thing because you could "go mad". But this has not been a problem for me in getting new cards.

Other factors I'm sure they take into account are:
1) any late payments
2) housing status
3) electoral roll
4) time at existing address
5) fraud markers from NHunter
6) only paying minimums
7) taking cash advances
8) utilisation

Some of these factors probably only count when taken with others. Eg cash advances combined with only paying minimums. Perhaps utilisation is an issue if you are maxed out completely. So keeping an usused account open could be a good thing.

My advice is not to let the CRA tail wag your financial dog. Closing cards can mean you're eligible for "new customer" offers later when you reapply. On the other hand, if over time your limit's been raised, then though an existing customer deal might not be as good as a new customer offer, it could be worth more because new customers tend to get lower limits to start with. Sometimes closing cards just makes life easier - no need to keep checking statements for fraud etc.

From what you've said, I wouldn't close any accounts.