Impact of Unused Credit

abaka

Hi,

I am currently battling through a legacy of bad credit card debt (none of it has defaulted, in arrears and I've never missed a payment)

I have more or less got my ducks in a row for the next 12 months....And as a result I now have a number of credit cards I'm not using and likely won't need to use for the next 12 months.

I have 2 Lloyds cards where the credit limit is £5000 and £4000, and a Halifax Card with a limit of £500

Now my credit limit/utilisation is currently sat at £14681 out of £39,4000

I'm considering cancelling the £5000 + £500 credit cards.....As this will still keep me below my total utilisation being 50%.

However, I'm wondering what the impact would be of cancelling the £4000 also....This would mean I would be closer to the 50% utilisation but still below it.

However, I've read cancelling accounts can have a negative impact on credit ratings....If I cancelled 3 cards now, would that alarm creditors?

Am I best to cancel maybe just one or two rather than all 3?

Thanks

tacpot12

You don't have to cancel the cards if you are happy that you won't use the credit when you can repay it. I have 4 cards with a combined credit limit of £28,000, and I spend no more than £2000 a year across all of them. 

born_again

Forget about your credit rating, banks never see it. They will look at the ratio of available credit/debt to income. 

So if you have no plan to use them, then get rid of the £500 & one of the others. As unless you have a income that is far above  the amount of available credit. It is not helping you.