sipar69 Posted November 13, 2014 Share Posted November 13, 2014 Anyone here work in the financial sector or know a lot about how settled credit cards affect credit records? I had a really good feeling yesterday when I paid off my two cards completely and chopped them up, as I really don't need them. Looking online there seems to be a lot of conflicting information about whether it's best for your credit record to keep unused credit card accounts open or close them. Any ideas? Quote Link to comment Share on other sites More sharing options...
glrnet Posted November 13, 2014 Share Posted November 13, 2014 You have PM Quote Link to comment Share on other sites More sharing options...
Tarmac@TarmacSportz Posted November 13, 2014 Share Posted November 13, 2014 Slightly off topic but i'm just going through an issue with Virgin, I paid off most of my credit card 3 years ago, thought the account was dormant as I was just paying a minimum amount each month, then I logged on last month to check if it was completely clear but there was nearly 3k on it. Admiral insurance had been taking £750 a year out for insurance I cancelled years ago, my fault for not checking I guess, I have so far managed to get the refund from Admiral but still trying to get the money I have paid in interest Quote Link to comment Share on other sites More sharing options...
Wasso Posted November 13, 2014 Share Posted November 13, 2014 Best to keep the account(s) active as they work towards providing a better credit score. Might be worth just using it once or twice a year and paying the amount in full to keep the scoring active. 4 Quote Link to comment Share on other sites More sharing options...
sipar69 Posted November 13, 2014 Author Share Posted November 13, 2014 Cheers for that Wasso and glrnet Tarmac - that's rough luck mate. Quote Link to comment Share on other sites More sharing options...
marzman Posted November 13, 2014 Share Posted November 13, 2014 Slightly off topic but i'm just going through an issue with Virgin, I paid off most of my credit card 3 years ago, thought the account was dormant as I was just paying a minimum amount each month, then I logged on last month to check if it was completely clear but there was nearly 3k on it. Admiral insurance had been taking £750 a year out for insurance I cancelled years ago, my fault for not checking I guess, I have so far managed to get the refund from Admiral but still trying to get the money I have paid in interest Ouch man! Quote Link to comment Share on other sites More sharing options...
JB-) Posted November 13, 2014 Share Posted November 13, 2014 (edited) On the subject of credit scores, if you want an idea of how yours looks get yourself a Noddle account. Free and simple. I've had an account for a while. It was recommended by that money expert bloke on TV. https://www.noddle.co.uk/ Edit: Martin Lewis, that's the guy. Edited November 13, 2014 by JB-) Quote Link to comment Share on other sites More sharing options...
sipar69 Posted November 13, 2014 Author Share Posted November 13, 2014 Cheers - I'll look into that. I do keep an eye on my score via Experian but it's pretty expensive (and I'm aware there are other agencies). Quote Link to comment Share on other sites More sharing options...
Flex Posted November 13, 2014 Share Posted November 13, 2014 Sometimes having too much credit might affect any future credit applications you may make as they see it as having too much potential to borrow and therefore overstretch yourself. If you do keep some perhaps consider asking them to reduce the credit limit. Quote Link to comment Share on other sites More sharing options...
sipar69 Posted November 13, 2014 Author Share Posted November 13, 2014 Cheers Flex - perhaps the answer is to keep one and close the other..... 2 Quote Link to comment Share on other sites More sharing options...
Flex Posted November 13, 2014 Share Posted November 13, 2014 Cheers Flex - perhaps the answer is to keep one and close the other..... Or give me the details 2 Quote Link to comment Share on other sites More sharing options...
docwra Posted November 13, 2014 Share Posted November 13, 2014 Best to keep the account(s) active as they work towards providing a better credit score. Might be worth just using it once or twice a year and paying the amount in full to keep the scoring active. Exactly what I do, use each one once a year and then pay it straight back off, you never know when you might suddenly need 10/20/30K and its nice to know its there as a safety net 4 Quote Link to comment Share on other sites More sharing options...
sipar69 Posted November 13, 2014 Author Share Posted November 13, 2014 Thanks everyone. Quote Link to comment Share on other sites More sharing options...
Wasso Posted November 13, 2014 Share Posted November 13, 2014 To be fair, although you have two cards, neither have any "lending" on them, the scoring will be based on what you are trusted with and have the "means" to pay. Two instances: 1 - You have two cards, both with £2k limit on each, but with no balances due. You will be trusted by the card companies to the sum of £4k in total. Your scoring will be based on how much you paid back previously, and the overall conduct of the accounts. 2 - Two cards again, this time with £10k on each. Whilst they are both zero, you have been trusted with £20k in total, again your scoring will be based on how the account was maintained. If a lender comes along, mortgage/car finance for instance, they would look at 3 areas, the amount of "trust" (Credit Limit) given by the card company, the conduct of the account and the balance owed. The lender would provide a greater level of finance if your account was similar to option 2, because of the increased credit limit. This is not to say that you have the "means" in which to pay, but they'd be more willing to loan based on the "trust" previously given by the card company. If your "means" are fully consumed, i.e. annual credit of £40k and you're at £35k, then clearly a loan/finance won't be provided. There's no harm in having two empty cards with huge credit limits. As long as you're not above or near your means, then credit will be supplied without issue. Your scoring will also reflect the same. My Mrs has a card, she doesn't earn a huge amount, but her credit limit is off the scale, higher than her annual salary. It shows the bank/card company are willing to loan the money due to the conduct of her account/card. He/she who doesn't pay the balances when due, defaults on payments will lose "trust", hold a low credit score and potentially reside at the higher end of their "means" to pay. I have 3 cards, all with tidy credit limits, not that I use them, but I swap between them for interest free credit, and also boosts my credit score, due to the "trust" / "Performance" / "Means". If you're a shopaholic then bin the cards! If you have Zeditus, keep the cards, as there's always a rain day for modifications Quote Link to comment Share on other sites More sharing options...
ZEUS Posted November 13, 2014 Share Posted November 13, 2014 Best to keep the account(s) active as they work towards providing a better credit score. Might be worth just using it once or twice a year and paying the amount in full to keep the scoring active. Exactly what I do, use each one once a year and then pay it straight back off, you never know when you might suddenly need 10/20/30K and its nice to know its there as a safety net This is what I do since paying both mine off. Quote Link to comment Share on other sites More sharing options...
Zeezeebaba Posted November 13, 2014 Share Posted November 13, 2014 My missus is an accountant, we have a spreadsheet for everything . Basically on her advice I have a credit card for maintaining a credit score and insurance on certain transactions I may make. I only buy my fuel on it mainly and pay it off regularly. Quote Link to comment Share on other sites More sharing options...
Paddy78 Posted November 13, 2014 Share Posted November 13, 2014 A credit card's always handy. It gives you additional purchase protection too. Quote Link to comment Share on other sites More sharing options...
Stutopia Posted November 13, 2014 Share Posted November 13, 2014 If there's little or no annual fee, I'd keep them. It's handy to have buying power at your fingertips and if you use them and clear them regularly then you've got another A paid account against you Quote Link to comment Share on other sites More sharing options...
KyleR Posted November 14, 2014 Share Posted November 14, 2014 Sometimes having too much credit might affect any future credit applications you may make as they see it as having too much potential to borrow and therefore overstretch yourself. If you do keep some perhaps consider asking them to reduce the credit limit. This is what was in my mind, but there are so many factors to take into consideration that it's really impossible for anyone here to give you the perfect advice. Quote Link to comment Share on other sites More sharing options...
Flex Posted November 14, 2014 Share Posted November 14, 2014 Sometimes having too much credit might affect any future credit applications you may make as they see it as having too much potential to borrow and therefore overstretch yourself. If you do keep some perhaps consider asking them to reduce the credit limit. This is what was in my mind, but there are so many factors to take into consideration that it's really impossible for anyone here to give you the perfect advice. True but at one point I had about £20k worth lying around, which is also a potential risk if someone some how got your details. Quote Link to comment Share on other sites More sharing options...
sipar69 Posted November 14, 2014 Author Share Posted November 14, 2014 Great forum this. Loads of useful advice. I think I've decided to close one and keep the other but not use it. I've got a few other forms of credit that I can use to keep up a good payment record e.g. the Z. Thanks everyone. Quote Link to comment Share on other sites More sharing options...
BulletMagnet Posted November 14, 2014 Share Posted November 14, 2014 If you have Zeditus, keep the cards, as there's always a rain day for modifications Oh man, that's the truth right there Quote Link to comment Share on other sites More sharing options...
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