Credit cards and credit rating
Discussion
Hi folks,
I have had a large debt on credit cards which is now almost paid off. I use my Amex and Barclay card for purchases and pay off in full monthly.
I have 4 other credit cards I used for balance transfers I.e. paying off debt. Two cards have 5k on them which I will pay off over the next 6 months.
I have an excellent credit history. My query is two cards have nothing on them and have 12.5k credit limit each. By closing them will it impact my credit file as my credit limit will decrease by 25k.
I ultimately just want 2 credit cards I.e. the ones I use. I never want to have balance transfers again!
I have had a large debt on credit cards which is now almost paid off. I use my Amex and Barclay card for purchases and pay off in full monthly.
I have 4 other credit cards I used for balance transfers I.e. paying off debt. Two cards have 5k on them which I will pay off over the next 6 months.
I have an excellent credit history. My query is two cards have nothing on them and have 12.5k credit limit each. By closing them will it impact my credit file as my credit limit will decrease by 25k.
I ultimately just want 2 credit cards I.e. the ones I use. I never want to have balance transfers again!
Could affect it as your 'credit utilisation' might be tricky. From what I understand anything under 20% is a positive.
20%-50% is neither negative or positive, anything over 50% has a negative impact.
So if you close two of your cards your affecting your credit utilisation; and in future how much you could borrow without negative impact.
That said, according to Martin Lewis, we (The UK) Don't actually utilise the credit score number anyway, It's only a very rough guide?
20%-50% is neither negative or positive, anything over 50% has a negative impact.
So if you close two of your cards your affecting your credit utilisation; and in future how much you could borrow without negative impact.
That said, according to Martin Lewis, we (The UK) Don't actually utilise the credit score number anyway, It's only a very rough guide?
Not being in debt is more important than what your 'credit score' is. Debt means you're keeping other people in jobs at your expense. Yes you can play the 'dancing about for 0%' game but it's frightfully tedious.
10 years ago nobody bothered about their credit score (ie 'debt suitability'). You either qualified for a loan or you didn't. And generally if your income wasn't enough to support it you didn't get it. So as long as you have more dosh coming in than going out, I wouldn't worry about it
10 years ago nobody bothered about their credit score (ie 'debt suitability'). You either qualified for a loan or you didn't. And generally if your income wasn't enough to support it you didn't get it. So as long as you have more dosh coming in than going out, I wouldn't worry about it
Bluemondy said:
Could affect it as your 'credit utilisation' might be tricky. From what I understand anything under 20% is a positive.
20%-50% is neither negative or positive, anything over 50% has a negative impact.
So if you close two of your cards your affecting your credit utilisation; and in future how much you could borrow without negative impact.
That said, according to Martin Lewis, we (The UK) Don't actually utilise the credit score number anyway, It's only a very rough guide?
Youre right. Currently its below 20pc. Closing them will definitely push it close to 20pc. I'll just put the cards into a safe and forget them.20%-50% is neither negative or positive, anything over 50% has a negative impact.
So if you close two of your cards your affecting your credit utilisation; and in future how much you could borrow without negative impact.
That said, according to Martin Lewis, we (The UK) Don't actually utilise the credit score number anyway, It's only a very rough guide?
Insanely the cards total to a credit limit of 95k????!! Makes me freak out hence why I want to close them but I won't until the mortgage is arranged.
Edited by Cimaguy on Tuesday 8th February 23:18
Simpo Two said:
10 years ago nobody bothered about their credit score (ie 'debt suitability'). You either qualified for a loan or you didn't. And generally if your income wasn't enough to support it you didn't get it. So as long as you have more dosh coming in than going out, I wouldn't worry about it
Isn't "get your credit score" simply a vehicle by which you are asked to input ever increasing amounts of personal data that may not be visible to the credit agencies?Cimaguy said:
Hi folks,
I have had a large debt on credit cards which is now almost paid off. I use my Amex and Barclay card for purchases and pay off in full monthly.
I have 4 other credit cards I used for balance transfers I.e. paying off debt. Two cards have 5k on them which I will pay off over the next 6 months.
I have an excellent credit history. My query is two cards have nothing on them and have 12.5k credit limit each. By closing them will it impact my credit file as my credit limit will decrease by 25k.
I ultimately just want 2 credit cards I.e. the ones I use. I never want to have balance transfers again!
Former credit underwriter here. I have had a large debt on credit cards which is now almost paid off. I use my Amex and Barclay card for purchases and pay off in full monthly.
I have 4 other credit cards I used for balance transfers I.e. paying off debt. Two cards have 5k on them which I will pay off over the next 6 months.
I have an excellent credit history. My query is two cards have nothing on them and have 12.5k credit limit each. By closing them will it impact my credit file as my credit limit will decrease by 25k.
I ultimately just want 2 credit cards I.e. the ones I use. I never want to have balance transfers again!
Sorry, no real simple answer, but 'maybe'.
It will hurt any 'score' that a credit agency will give you, they put a onus on 'available credit' so yeah, reducing that will hurt that 'score'.
Scores are pretty meaningless though, creditworthiness is more complex and it will depend on who your asking. I don't know much about mortgages, but my mortgage underwriting colleagues would always be slightly cautious of that, especially if you've had a previous large balance, because most people who move house will splurge on it, so if it's a 'close' call on affordability they might not fancy a gamble you won't spunk £20k on furniture and electronics post-move.
I financed vehicles for HNWIs and didn't give a toss about credit card limits.
It's all algorithmic these days.
I worked in a mortgage underwriting team a about 20 years ago. SO much will have changed since then.
At the time we had to assume that you would go out and max the cards. In short if there limit was available to you, we assumed that you would use it. After all there is nothing to stop you from doing so.
This only really made a difference where affordability was a close call.
At the time we had to assume that you would go out and max the cards. In short if there limit was available to you, we assumed that you would use it. After all there is nothing to stop you from doing so.
This only really made a difference where affordability was a close call.
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