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Credit Utilisation vs Total Available Credit
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Superhoopza
Posts: 604 Forumite

in Credit cards
If the aim is to be able to get a 0% offer or card somewhere to reduce interest, which would have a bigger beneficial impact on working towards that goal? If I was to close a card I have fully paid off and therefore reduce my total available credit to a lower percentage of my income versus increasing my credit utilisation by closing said card? I'm hesitant to use CRA's 'impact factors' so am reaching out for advice here. Is more information needed to better understand possible impacts?
Context:
Carrying balances on various cards and total debt will stay the same regardless of decision made to the above question.
Context:
Carrying balances on various cards and total debt will stay the same regardless of decision made to the above question.
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Comments
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Any lender will look at how much total credit you have available whether you are using it or not. And then decide if you can afford all of that if you maxed it out. So if you want to do 0% offers you either need to be getting those on the cards you already have or close a couple to allow you to get new cards - assuming your income can't support new cards any other way.
This is why consolidation loans often don't work or trying to get another card with a 0% deal. The lender has no reason to believe you are going to use the new available credit to clear the old debt. You could drop it on the dogs or book a cruise down the Nile instead.I’m a Forum Ambassador and I support the Forum Team on Debt Free Wannabe, Old Style Money Saving and Pensions boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
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So total credit available is more important in decision making than utilisation of available credit. Good to know, thank you.0
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Credit utilisation is just like the credit score. CRA rubbish. As far as lenders go.Life in the slow lane2
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born_again said:Credit utilisation is just like the credit score. CRA rubbish. As far as lenders go.0
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Superhoopza said:So total credit available is more important in decision making than utilisation of available credit. Good to know, thank you.1
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eskbanker said:Superhoopza said:So total credit available is more important in decision making than utilisation of available credit. Good to know, thank you.0
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Superhoopza said:eskbanker said:Superhoopza said:So total credit available is more important in decision making than utilisation of available credit. Good to know, thank you.Life in the slow lane0
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So are we saying the answer is different depending on the lender and their criteria and therefore we can't give a judgement of whether one is better than the other?0
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Superhoopza said:So are we saying the answer is different depending on the lender and their criteria and therefore we can't give a judgement of whether one is better than the other?
The lenders guard their criteria so we can only second guess how these two elements are factored into the overall decision.1 -
Grumpy_chap said:Superhoopza said:So are we saying the answer is different depending on the lender and their criteria and therefore we can't give a judgement of whether one is better than the other?
The lenders guard their criteria so we can only second guess how these two elements are factored into the overall decision.0
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