Improve credit rating advice sought

canadianBill

Hello,

I have accumulated a lot of debt due to student fees for a masters program. I ended up putting all the debt on credit cards over the years and have accumulated quite a bit of debt as a result.

My credit report used to be excellent but now it is poor due to the debt and almost maxing out all the credit cards. The question I have is:

Does it improve my credit score if I close credit card accounts even though the debt is still outstanding, or does it make sense to keep the credit cards open even though I don't use them for spending just to try to have an available credit amount higher than what I have maxed out?

For example, let's say my debt is £30,000 out of a total of £35,000 (so £5,000 available credit) spread over a few cards.

So does it make sense to close a few credit cards to say reduce my available credit to say £500 but still have to pay £25,000 in closed credit card balances and keep one card with £5000 on it but has £500 extra available?

Your advice is appreciated.

Geoff1963

There don't seem to be any rules on this ; but financial organisations like stability, so any change dents the number, even if it gradually settles back to a better number. If you have a "primary" bank, it might be best to keep their cards.

System

No lender uses credit scores so it is pointless worrying about them. What they will look at is your debt utilisation which is massively high as well as your debt:income ratio which again I assume is quite high. Both of those will have the biggest impact on your creditworthiness, not what some makey uppey score on Experian, Equifax, Clearscore or Noddle's website says.

canadianBill

Thanks for your responses. So with debt utilisation if I cancel cards would it still show my utilisation as high as this depends I'm guessing on what the maximum would be on credit cards even though I do not have access to funds?

Debtslayer

Your utilisation will still show as high regardless if you have cancelled the cards or not.
You need to pay down the debt first and foremost.
If you leave them open as you pay them down then you may get balance transfer offers off them to shift higher APR's to
Also your utilisation will start to look better