What to do with so much available credit?

antonyburden

These are my current credit cards, I plan on taking out a £25,000 personal loan (over 6 years) for a vehicle in a few months time.

Provider		Limit	Balance	Available	Opened		Notes		
[B]Barclaycard[/B]	£9,200	£0		£9,200	2014		Was used for balance transfer, not used for over 18 months	
[B]Tesco[/B]		£10,800	£1,000	£9,800	2014		Joint cards used for monthly expenditure		
[B]MBNA[/B]		£9,800	£0		£9,800	2016		Was used for balance transfer, not used for over 18 months		
[B]Virgin Money[/B]	£12,000	£0		£12,000	2016		Was used as balance transfer, paid off January 2019		
[B]Paypal[/B]		£1,800	£0		£1,800	2016		Was used for 0% purchase, paid off January 2019		
[B]Sainsbury's[/B]	£8,100	£0		£8,100	2017		Was used as balance transfer, paid off January 2019		

Total Credit Available: £51,700, Balance: £1,000, Available: £50,700, Usage: 2%

Hoping to use Tesco or Sainsbury's with an APR of around 3-4% which is a monthly payment of around £380-£400 (Up until January 2019, I was paying £997 a month to clear debt - all planned via 0% and aided in house extension, improvements etc. not debt consolidation)

My concerns are my low usage and high credit availability, I only ever use the joint Tesco card for monthly purchases and it gets paid in full. The other cards have only ever been used for 0% balance transfers.

I am 48 years old, my salary is 40k (45k to 48k with yearly bonus), my wife is just 30 hours a week minimum wage so brings home an additional 10k

• Should I apply for the loan joint or solo? (All our bank accounts and the tesco card are joint)
• Should I close any of the above cards? (All in my name only)
• Any other advice?

I have scoured the forums and google but some of the advice is old and contradictory.

Thanks for any help given and sorry if this has been asked so many times already.

[Deleted User]

You.could perhaps lose one card if you don't actually use them at all, but it's unlikely to have a significant impact. Apart for PayPal, Sainsbury's looks to be the runt of the litter.

Your income is the most likely hurdle, so if your wife has a decent credit file and no debt , a joint application may be better.

dont_use_vistaprint

I dont think having all those cards makes much difference either way, its neither positive or negative as its not telling a lender much. Up until recently I only ever had one CC but score top in lenders credit scoring algorithms due to amount of history of never making late or missed payments across credit agreements like mortgages, loans, mobiles and a single CC.

Why dont you just have a look through your credit history, if you see more than one or two late's or defaults in the last 5 years you will be viewed very negatively right now and unlikely to get the headline 2.6%. Other than the obvious things like affordability & time at address will apply

antonyburden

Thanks,

I've never missed a payment on any of the cards/loans/mortgage apart from a single £5 mistake with paypal credit and confusion over payment date.

I know I can afford the payment easily and still save for our future, been at current address for 20 years.

My current score is 640 with Noodle and 493 with clear score (Clear Score tends to go up and down, was 513 around 6 months ago - nothing has changed apart from lowering my overall debt!)

Nasqueron

Your score is irrelevant, only your history


However, you have £51700 worth of credit available if you maxed everything out, add on £25,000 loan and you're talking about nearly £77k of potential debt i.e. nearly twice your guaranteed salary. Unless your earnings are 150k or so, you may struggle to get 25k loan on top because lenders have to be responsible and consider what happens if you have all that debt together (e.g. running up the cards as well).

antonyburden

So I should potentially look to close all cards bar the Tesco?

antonyburden

See this is why I get confused, on the way hand I have 1 person telling me "I dont think having all those cards makes much difference either way" and then I have another telling me I have too much credit!

It's such a mine field - perhaps a compromise... as I have no need of the other cards I will get rid of Sainsbury's, PayPal and Virgin (total 22k). This should give me 3-4 months for the credit agencies to see the closed accounts and reduced credit availability before I apply.

Gaz83

antonyburden wrote: »

See this is why I get confused, on the way hand I have 1 person telling me "I dont think having all those cards makes much difference either way" and then I have another telling me I have too much credit!

It's always going to be this way, because lenders don't make their lending criteria public. The best you're only ever going to get is advice based on a poster's own personal history and interpretation.

Nebulous2

Gaz83 wrote: »

It's always going to be this way, because lenders don't make their lending criteria public. The best you're only ever going to get is advice based on a poster's own personal history and interpretation.

To some extent you are right - but some posters work in the industry (not me) and have more knowledge of how things work than others. All opinions are not worth the same.

Personally I think there is a lot of rubbish talked about potential limits.

I have had limits in excess of my income for over 20 years, at times in excess of twice my income, and have never had a problem getting financial products. Lenders act in concert. If one gives you a high limit others trust you because the first one does and so on. They also don't like changes, closing several accounts just as you apply for a loan may concern them about what might be happening.

There are much more important things than limits; indebtedness, affordability, stability of employment, stability of address, electoral roll, good history of making payments etc. Credit limits come far down the pecking order.

Gaz83

Nebulous2 wrote: »

To some extent you are right - but some posters work in the industry (not me) and have more knowledge of how things work than others. All opinions are not worth the same.

Yeah, but they'll only have knowledge of how their particular company works, not all.

dont_use_vistaprint

Nebulous2 wrote: »

I have had limits in excess of my income for over 20 years, at times in excess of twice my income, and have never had a problem getting financial products. Lenders act in concert. If one gives you a high limit others trust you because the first one does and so on. They also don't like changes, closing several accounts just as you apply for a loan may concern them about what might be happening.

I think that's true in general but there have been some changes in the last few years with more responsibility on lenders to factor in affordability. But that is not based on credit history, just a few silly questions about your bills. I dont see any evidence of them acting in concert like that and trusting limits given by others, do they even see limits when scoring or just the outstanding balances ? More likely they just use very similar principles to credit score.