Closing 6 credit cards and worried about impact on score

Legacy_user

I was very foolish in my 20s and ended up with a lot of credit cards and a lot of constant balance transfers.
Long story short – I sorted myself out a few years ago and have basically had no fun whatsoever. I now have 6 credit cards ( I know) all at 0% and all of which are due to clear completely in September. I've always paid them off and always had excellent credit.
I’m looking forward to being debt free and then plan to apply for a mortgage as my savings will be enough then for a 10% deposit for a house in Belfast.

However I’m a bit worried about what to do with the cards when they close.
One of my old cards cleared last week and I then closed it.
However my credit score seems to have taken quite a hit since closing it.

I’m worried now about closing the other 6 I'm September when they clear and then applying for a mortgage not long after.

6 empty credit cards seems like an awful lot of free credit to have when applying for a mortgage, but if closing one card hit my credit score that badly Im concerned about closing 6 at once.

I'm clearly an eejit when it comes to finances as I got into this mess and was wondering if anyone who knows a bit more would have any advice?
Thanks in advance

[Deleted User]

Don't worry about it - your score isn't a real thing lenders use.

Why do you want to close the cards?

Who are they with, what are the limits and the APR% ?

Willing2Learn

Hi bronte88 and welcome to the forum

In an ideal world, you want to keep 3-4 cards and keep the their respective accounts rolling. Lenders probably like to see long and continuous history of successful account management.

System

Hi !!! - thanks for the reply

I'd wanted to close them as I'd been told it was a bad idea to have too much credit sitting them as mortgage lenders could look and see the amount of potential debt I could get into? However as mentioned I am so rubbish with this sort of thing not sure if that's true?

They are with Halifax, Barclaycard, M and S, MBNA, Platinum Bank of Scotland and Virgin. The limit is between £5,000 and 8,000 on each of them.

I'm not sure about APR as hadn't planned on using them ever - they were all just for clearing my previous misdemeanours on 0%! I think they are in the 20s though.

The one I just closed was Lloyds.

Thank you for the credit score reassurance!

[Deleted User]

Me, personally, would keep them.

Use them every so often for your normal daily purchases or items over £100 that you want S.75 Protection on, but, make sure you pay them back in full each month after the statement.

If in doubt about "available credit" then speak to a broker.

Many people have more cards that that with higher limits and get mortgages from High Street lenders with no problem

Verityspinelli

I went to see my bank manager today about a totally different matter and I discussed with him about how having a lot of credit cards with high limits and zero balances are viewed by lenders, He said even If you have just one card and pay it off each month that is good enough, lenders will look at the amount of available credit you have and sometimes high levels of available credit is not always looked upon as favourable and can sometimes go against you. When I told him I had heard closing down cards was not a good thing he looked at me as if I were mad, apparently he’d never heard that before and said mortgage lenders do not make it a priority that you have lots of credit cards and lots of available credit to be given a mortgage, quite the opposite.

If you don’t need the cards close them down, try to keep the oldest one which is seen as an aged account but as long as you are sensible in paying off the remaining card closing the other cards down will not cause you any real problems in the long run. It may even open you up to much better deals in the future. There will be those that will say keep the cards open because you might need it one day but do you really want to be borrowing again after seeing first hand where that leads. I have closed down 4 cards in the last 2 months and it has not affected my credit report at all.

Don’t worry about it, closing cards will not hurt your chances of getting a mortgage in the future.

Willing2Learn

Hi Verityspinelli,

It is always good to have more than one card, just in case your main card stops working for some reason. It is good to have backup

[Deleted User]

Verityspinelli wrote: »

When I told him I had heard closing down cards was not a good thing he looked at me as if I were mad, apparently he’d never heard that before

It shows how much lending has become centralised, and branches are little more than a place to hang posters today.

Takmon

Verityspinelli wrote: »

I went to see my bank manager today about a totally different matter and I discussed with him about how having a lot of credit cards with high limits and zero balances are viewed by lenders, He said even If you have just one card and pay it off each month that is good enough, lenders will look at the amount of available credit you have and sometimes high levels of available credit is not always looked upon as favourable and can sometimes go against you. When I told him I had heard closing down cards was not a good thing he looked at me as if I were mad, apparently he’d never heard that before and said mortgage lenders do not make it a priority that you have lots of credit cards and lots of available credit to be given a mortgage, quite the opposite.

If you don’t need the cards close them down, try to keep the oldest one which is seen as an aged account but as long as you are sensible in paying off the remaining card closing the other cards down will not cause you any real problems in the long run. It may even open you up to much better deals in the future. There will be those that will say keep the cards open because you might need it one day but do you really want to be borrowing again after seeing first hand where that leads. I have closed down 4 cards in the last 2 months and it has not affected my credit report at all.

Don’t worry about it, closing cards will not hurt your chances of getting a mortgage in the future.

Next time you see your bank manager ask him when was the last time he looked at someone's credit report and personally made a decision on whether to offer them a credit card, mortgage, loan etc. He will most likely not have even had training in that area and certainly won't know any of the confidential acceptance criteria. So take his advice with a very big pinch of salt.

Ben8282

Verityspinelli wrote: »

I went to see my bank manager today about a totally different matter and I discussed with him about how having a lot of credit cards with high limits and zero balances are viewed by lenders, He said even If you have just one card and pay it off each month that is good enough, lenders will look at the amount of available credit you have and sometimes high levels of available credit is not always looked upon as favourable and can sometimes go against you. When I told him I had heard closing down cards was not a good thing he looked at me as if I were mad, apparently he’d never heard that before and said mortgage lenders do not make it a priority that you have lots of credit cards and lots of available credit to be given a mortgage, quite the opposite.

If you don’t need the cards close them down, try to keep the oldest one which is seen as an aged account but as long as you are sensible in paying off the remaining card closing the other cards down will not cause you any real problems in the long run. It may even open you up to much better deals in the future. There will be those that will say keep the cards open because you might need it one day but do you really want to be borrowing again after seeing first hand where that leads. I have closed down 4 cards in the last 2 months and it has not affected my credit report at all.

Don’t worry about it, closing cards will not hurt your chances of getting a mortgage in the future.

Don't believe everything you are told by bank staff. They often don't know what they are talking about.
Did you really get to see a real bank manager? WOW
The idea of only having one credit card is really quite foolish although no doubt the bank manager would say otherwise if your one and only card was issued by their bank!

20aday

Echoing some of the replies above, look at keeping the card you've held the longest, and also a back up for emergency purposes.

In terms of appointments with branch staff I recall a lady in NatWest asking me why I'd taken out a payday loan; I hadn't-it was a payment from Quidco, the cash back site. And on a visit to Lloyds Bank the gentleman there proceeded to tell me too many soft searches (from using comparison websites) would also harm my 'credit score'. Shame he meant hard searches....