Credit Cards - Best to Cancel or Keep?

8184mand

I have got 3 credit cards which are all paid off no balances, one has a limit of £10,200, one £3,400 and one £1200. I am hoping to purchase a new house next year and I am wondering what will have the best impact on my credit rating - cancelling these cards, or having them still open with a zero balance. Can anyone advise? I also have an overdraft facility which has quite a high limit but not being used so I guess a similar question?

ukamber1

8184mand wrote: »

I have got 3 credit cards which are all paid off no balances, one has a limit of £10,200, one £3,400 and one £1200. I am hoping to purchase a new house next year and I am wondering what will have the best impact on my credit rating - cancelling these cards, or having them still open with a zero balance. Can anyone advise? I also have an overdraft facility which has quite a high limit but not being used so I guess a similar question?

I no expert but think as long as all those credit cards (and overdraft) are still active, they will effect the amount you can borrow when applying for a mortgage. Even tho the balances are at 0 Lenders can still see the credit available to you and that will likely impact on your affordability. Its a good idea to have a credit card open and active as using it and paying it off each month shows Lenders you can manage your accounts but when the time comes to make that new house purchase and apply for a mortgage it might be a good idea to close down 1 or maybe 2 of those credit cards...

Hopefully someone will jump on thread and confirm...

best wishes

[Deleted User]

I wouldn't worry - the limits aren't that big and you're not carrying balances.

Make sure you keep using them to maintain a good credit history, clearing in full each month.

SparklesJD

Some lenders don't like to see large 'available balances' when they search you - I know we wouldn't like it (small community lender). The most you could borrow would be under £15k + overdraft, which mortgage lenders might be OK with, as it's a smallish amount in the grand scheme of things, as zx says.

I'd be tempted to close a couple (keep one for emergencies and larger purchases) if you're not using them, just so you're not tempted to use them on stuff for the new house! Keep an eye out for them increasing your limit too.