Unused credit cards and other accounts

movingforward2010

applying for a mortgage around April next year. I currently have 2 credit cards

Lloyds with 8.5k limit- haven’t used it for months

M and S 6k limit use monthly and pay off

I also have a chase bank account I never use.

Should I close the Lloyds CC and chase account? Would this look better when applying for a mortgage?

Brie

I'd be looking at the other credit you might have available. Any overdraft? Monthly paid insurance, big mobile or Sky packages? Catalogue accounts?

The mortgage provider will be looking at all the available credit you have and factor that in when deciding what you can afford to pay monthly. If you have a very high salary then £13.5k available on cards isn't going to be an issue. If you don't have a huge salary and have an overdraft, other accounts (used or unused) as well as everything being paid on a monthly basis they may have concerns.

Double check a couple of the free credit history reports to ensure there's no CCJs laying about.

And make sure you're registered to vote - makes you look like a stable upstanding individual apparently.

CliveOfIndia

It's a difficult one, to be honest. On the one hand, having credit available can sometimes count against you - on the basis that you could, in theory, go out on a massive spending spree tomorrow and find yourself unable to repay the debt. On the other hand, it shows other lenders that Lloyds are prepared to extend that credit to you.

That said, a combined limit of 14.5K is not excessive (although obviously it does depend on your income and other obligations).

On balance, I'd be tempted to leave things as they are. The M&S card will be gradually building up a positive credit history - as long as you're always repaying in full every month. The "dormant" Lloyds card won't be doing much one way or another in terms of your credit history. You could close it if you never plan on using it again - most lenders will close a card anyway after a prolonged period on zero balance and non-use. If you'd like to keep it, just put a small spend on it each month and clear it every time the statement arrives, just to keep it ticking over.

But as I say, in the grand scheme of things it probably won't make a great deal of difference either way.

The current account won't have any impact on your credit file, unless it has an overdraft facility. Even then, the impact will be negligible if you never use it.

movingforward2010

https://forums.moneysavingexpert.com/discussion/comment/82138823#Comment_82138823

I do have very and next accounts which I don’t use often and always pay off in full if I do

my salary is £33000

My outgoing are £655 - the rest of my monthly salary I put in my savings account ,usually about £1600

Rent ( living at mums, included and bills and food) £200

Car payment £220 ( lease includes road tax and maintenance)

Petrol £60

Car Insurance £35

Mobile phone £20

Clothing £30

Social £60

Vaping £30

As I’ve been saving for a mortgage deposit I don’t actually do much or go anywhere.

nothing adverse on credit files and I’m on the electoral register

movingforward2010

https://forums.moneysavingexpert.com/discussion/comment/82138827#Comment_82138827

I only opened the m and s card in June because the 0% on purchases on my Lloyds one ended. I’ve I just like using it for the protection when buying things that are a bit more expensive online.

Brie

I suggest closing the Very & Next accounts as why have them when you've got the credit cards? I believe they also have very high interest rates which would be the concern of any new creditor as those are the sorts of accounts that can spin out of control. Not an issue for you but it will just be tidier if they aren't there cluttering things up.

The car lease will be a credit agreement so that will show on your credit history but that's not a problem as it's a decreasing amount owed each month so works in your favour. Phone contract is also a credit agreement but I don't think will be a problem when it's a relatively low amount. It's the ones that are £100 a month that shows that someone just had to have the latest iPhone that are more of an issue.

That £200 all in for your rent is nice! Hope having to fend for yourself won't be too big a shock!! Maybe get your mom to list all her monthly expenses if she hasn't already so you know what to expect when you're in your own place. My MiL gave me her expense list when we were buying our first place - bit of a shock when you don't know what things cost and have to work that into your budget!!

movingforward2010

https://forums.moneysavingexpert.com/discussion/comment/82139021#Comment_82139021

I think I’ll close the next but keep the very, only because they have good offers for account holders with cash back and discounts I use, and they pay it off when I get the statement. But you’re right, the next one is pretty useless.

I was living alone until 2 years ago but moved back to my mums to be able to save for a mortgage deposit, so I’m prepare- ish 🙈but yes it will be a shock again!