To close or not to close - credit score impact

cheeseball73

Hello! I have a credit card with First Direct, my current account provider, which I haven't used for a while. When I phoned today to ask for a replacement card - I wanted to use it to pay a regular bill on, paying off the balance in full each month, to build my credit score up following paying off a DMP -  they said it was inactive, and if I did want to use it I would have to close the account and reapply - the account exists in their system and on my internet banking, but as it hadn't been used for a while they didn't issue a new physical card to me, and it's been marked as inactive on their system. I paid it off in full before the DMP began and so haven't used it for five years.

However, the account is showing as active on all the credit reference agency files with a balance of 0 and limit of £3500 - should I keep it 'open ' just to keep my credit utilisation ratio up, or should I request to close it? 

th081

How much other credit do you have 

born_again

It's going to have zero effect, as you have to reapply. 

Forget your score. it is your credit history that counts & DMP will not have helped.

Odds on FD will refuse your app.

But never not use a CC for anything more than a year.

cheeseball73

I don't want to apply for a new credit card right now - I was hoping to use the old one for that reason. 

I don't have any other credit accounts bar my overdraft. 

born_again

Sadly after 5 years of no use, it not going to happen without applying. As that is their procedure. As well as clearly the DMP has been flagged up on the system checks.

As I said, score is meaningless to a lender. History is what counts.

daivid

Use eligibility checkers to find a suitable replacement, starting with first direct if you like (they may say no). Some think closing accounts just before an application can be negative so I would take out the new card first if eligibility is promising.

paul_c123

Its interesting they described it as "inactive" instead of "closed". I suppose it clarifies the misunderstanding which can happen if you say an account is closed with a balance on it - because you're still obligated to pay off that balance, you just can't spend on the card.

In the grand scheme of things, it showing as active with £0 balance for a while, on credit reference files, is neither here nor there, I doubt if it would sway a decision for future credit.

Markus7_

Hi I have 2 credit cards on a zero % transfer scheme, would I be better to put both balances on 1 card, and would that improve ny credit score

MorningcoffeeIV

No. But it wouldn't matter if it did. You can't cash the points in for anything.

Only BT if it is favourable to you.

MrFrugalFever

cheeseball73 said:

Hello! I have a credit card with First Direct, my current account provider, which I haven't used for a while. When I phoned today to ask for a replacement card - I wanted to use it to pay a regular bill on, paying off the balance in full each month, to build my credit score up following paying off a DMP -  they said it was inactive, and if I did want to use it I would have to close the account and reapply - the account exists in their system and on my internet banking, but as it hadn't been used for a while they didn't issue a new physical card to me, and it's been marked as inactive on their system. I paid it off in full before the DMP began and so haven't used it for five years.

However, the account is showing as active on all the credit reference agency files with a balance of 0 and limit of £3500 - should I keep it 'open ' just to keep my credit utilisation ratio up, or should I request to close it? 

You say you only have an overdraft credit facility now and nothing else, assuming the DMP has run its course now?

Your credit report history will reflect the DMP and as such you may find access to credit incredibly challenging for quite some time, not least FD as they are a prime lender.

If you need access to a credit card to start building up your history to show you can effectively manage low levels of borrowing then I’d suggest looking at lenders such as;

Aqua
Marbles
Fluid
Capital One
Vanquis/Chrome
118 Money

Use their eligibility checkers first though!