Is it a good idea to close down a credit card I don't use any more?

Jlawson118

I'm trying to build up my credit score by the Summer to be accepted for a particular card. I know the number means nothing but I do know the higher the number, the more likely my report looks better to lenders.

I currently have a Barclaycard reward that I use for most of my purchases, and always pay my bill in full every month. Alongside this, I have a First Direct Gold card, yet I barely use it. I was drawn into it by the incentive and since receiving it, I've not used it. I'm thinking I might as well close it down.

Though I know when I closed my Aqua card down a few months ago due to having these two, my score dropped significantly, though I'd had a few hard credit checks run on me for a phone contract, a current account and the Barclaycard.

Am I better off just keeping the account open, and show that I'm not running up any debt on it? Or would it be better to close it?

[Deleted User]

Jlawson118 wrote: »

I know the number means nothing but I do know the higher the number, the more likely my report looks better to lenders.

Unfortunately, that's not the case.

If it was, you should go bankrupt, as that tends to reset the score to the maximum, due to not having any active credit.

Choose between a high score and building a good credit history, It's unlikely you will have both.

Jlawson118

Deleted_User wrote: »

Unfortunately, that's not the case.

If it was, you should go bankrupt, as that tends to reset the score to the maximum, due to not having any active credit.

Choose between a high score and building a good credit history, It's unlikely you will have both.

My aim is to build good credit history then

[Deleted User]

Then consider your available limits and balances against your income.

Would a lender be worried by the amount of credit you have available, if you were to use it all?

Are you using a large proportion of your available credit?

Don't open accounts just to get a few quid cashback. Open the ones you need.

Jlawson118

Deleted_User wrote: »

Then consider your available limits and balances against your income.

Would a lender be worried by the amount of credit you have available, if you were to use it all?

Are you using a large proportion of your available credit?

Don't open accounts just to get a few quid cashback. Open the ones you need.

Currently I have an overdraft of £1000 that I was going into for a few days at a time a few months ago when money got hard, but nothing major. The credit limit I have with Barclaycard is £3500, I generally spend about £500 per month, if that. Sometimes it has been more but I've never been anywhere near the £3500 mark!
And my FD card has a limit of £1000. I don't think I've ever been over £10 of this.

So out of £5500 altogether, I don't even know if they'd be worried, though I've barely been maxed out or gone anywhere near my limits which is a good pointer

Nasqueron

Jlawson118 wrote: »

Currently I have an overdraft of £1000 that I was going into for a few days at a time a few months ago when money got hard, but nothing major. The credit limit I have with Barclaycard is £3500, I generally spend about £500 per month, if that. Sometimes it has been more but I've never been anywhere near the £3500 mark!
And my FD card has a limit of £1000. I don't think I've ever been over £10 of this.

So out of £5500 altogether, I don't even know if they'd be worried, though I've barely been maxed out or gone anywhere near my limits which is a good pointer

£5500 on a salary of £10,000 is bad
£5500 on a salary of £100,000 is not an issue

They look at how much credit you have vs your income - if you have a lot of credit but little income and could easily run up the limit without being able to pay it back, then it would be an issue. If you could easily afford to pay back then it wouldn't

chanz4

Don't count on it my limits are about x5 times my income, doesn't effect in anyway

20aday

I'm not sure how long you've held your First Direct card for but personally I'd keep it open and spend something on it a month before paying the balance of in full.

It'll build some credit history and it's also wise to have a back up I.C.E.

Anthorn

My opinion is quite arbitrary on this and related to the previous post by zx81: If the credit limit affects your credit to the extent that you are unable to obtain further credit because it's maxed to what lenders think your available credit should be then close the card account. Otherwise you need the account for your credit history. In either case though a settled account will be favourable just the same as an active account but the active account is better.

Don't take too much notice od credit scores provided by CRAs and others. They are a rough guide and nothing more than that.