Question: Not your rating per se, but every lender will know how much they are > > willing to loan you considering your rating, your income and your current > > debt > > loading. So if they would be willing to loan you $100,000, but you have a > > credit card with a $5000 limit, they will only loan you $95000 unless you > > get the bank to reduce your limit on the credit card. So credit cards do > > cost you something re applying for a homeloan etc even if they aren’t > > carrying a balance.
> Exactly. The more credit you have available to you (even if you use very > little of it), the higher your credit risk to any new creditor. That’s > because you could (theoretically) go on a shopping spree tomorrow and max > out every card. So close out all inactive accounts, and consider getting the > limit on other accounts reduced (unless you genuinely believe you might need > all of it in the near future).
Answer: On the other hand, most lenders will if asked tell you whether they are taking the credit cards into account in workin out your limit, and accept you going off and canning the card just before they loan to you, so if you keep an empty card just for emergencies it may not be necessary to cancel it until just before you take out your home loan.
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