Credit Cards - Dormant Cards, Underutilised Credit Limits - Help or Hindrance?

adew5000

I will be looking for new line/s of credit soon for important home improvements (new boiler etc).  I'd like to have the best chance of getting additional credit and hopefully at a favourable rate.

Lines of credit under consideration are:
Interest free credit from a supplier
New credit card with interest free balance transfer
Regular bank loan

I currently have three credit cards.  Two that I use and one that is dormant.

My question is will these cards have any positive/neutral/negative impact on any new credit application?

Should I cancel the dormant card or reduce its credit limit or won't it make a difference?

One of my other credit cards, that I do use, has quite a high credit limit that I don't fully utilise.  I pay off my credit card balances every month.  Would reducing the credit limit be of any benefit?

Do number of credit cards and existing available credit have any impact?

I'd appreciate any advice.  Thank you.

Brie

A creditor will be concerned about the risk of lending you money so will look at the amount of credit you have available (whether it's used or not) compared to your income.  

If you have a card you absolutely never use then I would suggest you close that down.

The one with a high limit - do you ever get 0% deals offered to you?  Do you have to use it for other things?  If you could stop using it for other things and then get a 0% offer you could buy the new boiler etc on your other card and then balance transfer to the one with the high limit.  Obviously it's generally said you shouldn't then use this card for any other purchases as normally you'll be charged interest from day one of the purchase.

Alternatively you could reduce the limit of this high card to improve your risk profile.  This should make you a better candidate for new credit elsewhere.

Check also if the tradespeople you might use will take credit cards.  Some large DIY places that do home improvements offer a credit account where you can have 0% for 4 years and your payments set to automatically clear the entire balance within that time.