if i cancel my unused credit cards, will it affect my credit when purchasing a new home?

Question

I'm in the process of looking for a new home, but have about 12 open credit cards. 11 of the 12 credit cards have a ZERO balance, but i dont know whether it's better to cancel them, or leave them open. I want to know what would benefit me the most when purchasing a home( as far as credit ).

Answer 1

It's actually better to leave them open. It shows that you have credit that you aren't using and that's a good thing.

Answer 2

Don't cancel them, arrange to pay to full amount by direct debit when the bill is due(that way you pay no interest). Rotate the cards use a different one each month. Also arrange to have them request the money (from your account) within a week of you salary that way you know that there will be sufficient funds to pay the credit card bill. If you are really smart you will use the current card for all your shopping, in effect getting an interest free loan. The credit card companies hate it when you do that but there is nothing that they can do about it. The other advantage is that your credit rating soars, you are using credit but managing it sensibly. This little trick was taught to me by a bank manager.

Answer 3

The more you have open, the lower your credit score.

A) Why would you need that much of a credit line
B) look at your potential debt crisis


lenders will look at that and wonder... especially B.

you may not have the debt now, and maybe you wont ever, but you have to admit, you could really screw yourself with 12 different debts

so, i would also agree... cancel some of them

if you really want a solid answer... go to a local bank and ask them...

just a general inquiry type thing with the manager, chances are, because they will be interested in doing business with a potential customer, they will answer your questions better than someone with a yahoo profile could...

Answer 4

Having unused credit hurts your score. Not as much as having used credit, but more than not having any available credit.

Lenders look at your debt to income ratio, not your "debt to credit" ratio (there is no such thing in underwriting). Unused credit is seen as potential debt, and it counts against you.

Credit cards are good to have in case of an emergency, but you should close the ones you don't need. Maybe close the 11 unused ones, or close 10 and keep an extra unused one. One of my cards gives me my Experian credit score for free each month - if you keep one like that, you will see your score jump 20-30 or more points 30 days after you close the unused accounts.

Answer 5

Close the accounts. They are hurting your credit score.

Think about it. If someone lends you money to buy a house you can go out the next day and use all that credit and then get in a situation where you can't pay your bills.

Answer 6

Keep the credit cards open It makes your credit go up you want your dream home and I wish you luck on your new home

Answer 7

Keep them. It looks better on a pre-approval and credit report to have them as open trade lines. It says that you have the possibility to borrow money and any given time, yet you are responsible enough not too.

Answer 8

your debt to credit ratio is a factor in the secret formula for computing your credit score. so keeping these cards will lower your debt to credit ratio. having a lot of credit cards could reflect poorly on your credit score. i would consider canceling some, but not all.

Answer 9

I say keep them (don't use them). The rate you get on a mortgage will not be affected by the decision to keep or close the accounts. Wither or not a mortgage company will give you a mortgage or not will. If you are faced with a mortgage company not giving you a mortgage, go to another company.

This is something you should not worry about.

Answer 10

YES!! Keep them, that increases your debt to income ratio