Hi all, got a few no fee cc over the years, just wondering is it possible to close them off without negatively affect my credit rating? Or should I just keep them and lower limit to lowest possible?
I'm looking to get a business loan in a few months time, so hoping to have highest credit rating possible.
Thanks!
I'm sure having few spending cc with good repayment would help with credit rating. The problem is I got few like Coles, virgin with credit limit almost 20k.
You would be better to close any cards you are not using. That available credit actually is negatively affecting your ability to borrow elsewhere, like mortgage, or car loan, if needed.
That's what I thought too, but then again, would 30-40k extra limit make that much difference to 500k loan?
I was told by a mortgage broker that 3% of total credit limit is considered as monthy expense, when calculating borrowing capacity.
Definitely. Try a loan calculator with and without credit limit and you'll see
What makes you believe closing them will negatively affect your credit rating?
BTW it will be positive for your credit rating
Just some internet reading, granted most of them are from american site
It sounds stupid on paper.
But ive recently closed a credit card, and my score has gone down
Credit score bounces around and is different to your credit file (comprehensive credit reporting)
I heard under the old system the credit raters could not tell if you or the bank closed the card so it always negatively affected
They make it extremely difficult to close cards, i've tried and given up. I just cut the cards up and then if the time comes and i need a loan, i put the details on the application and tell the bank/lender i want to close that account and they organize it!
How so? Just insist yes, they might persuade you to stay with balance transfer offer or offer to reduce limit. If the offer too good to refuse like 0% BT for 18 months with no BT fee, sure why not..if not just close it, and be done with
I could probably do so in writing, however, whenever i try to close a CC account over the phone, they put you on hold until you give up.
Not in my case, they probably put you on hold to speak to customer retention team that's all. Sometimes they would come up with good offers, why not give it a shot anyway if not in rush to close it
@Lancerx: Yeah I might. However I don't have any cc debt at the moment so dont really have the need for a BT
@crashloaded: WHAT?! WIth all those GC offers & pre-xmas sale, you're telling me you don't have any cc balance? Surely that's against OzB code of conduct? ;)
@crashloaded: Wouldn't it be better just to apply a new 0% BT card? Unless you're talking about significant cc debt? O.O
@Lancerx: It was significant enough and I was refinancing regardless of the cc debt so was just an easier option.
I really don't understand this attitude, and I've seen a few similar comments. It is not hard to close a credit card. All you need to say is "no thanks, I want to close immediately please". Say it twice, say it three times. I have never had to say it a fourth.
Sometimes you get the persistent pleas to get you to stay. Personally I quite enjoy shutting these down and telling the person that their product is inferior and I have absolutely no use for it.
Easier to make it someone elses problem when the time comes.
In the US system, closing a card does definitely have a small negative impact on your credit rating.
But until recently Aus did not have a system to track the credit limit of all cards you have.
Recently with comprehensive credit reporting, CC providers now report this info and how you repay your card. But there's not much information about how they calculate the credit rating yet. Also, this formula changes depending on the credit reporting agency.
Having said that, credit rating is just a number and big banks usually do not care about that. They would evaluate your merits on a case by case basis. So not having a credit card may be better ?? But I'm not 100% sure.