I think this may have been brought up before, but here's my question: My wife and I carry 4 credit cards with about $50K of available credit. We have no balances on any of the cards and have no plans to carry any balances. So, with respect to credit scores, does it matter that we carry so much available credit? Would it be beneficial to our credit scores to cancel 2 of the cards to bring our available credit down to about $25K? Or, does it not matter at all? It doesn't make a difference to me to cancel a couple of them since we have no need to use all of them anyway. Thanks for any advice.

 

I think it would be beneficial to your credit score to use some of them credit cards and pay for them in a tiimely manner. This is just to show there are activity in your cards and you pay for them on time.

 

My impression has always been that it doesn't matter at all. I don't think available credit itself impacts your credit score in any appreciable way, and believe it's only actual debt that matters. Of course, this is only an educated guess.

 

one of the fators (out of about 5 or 6) is the proportion of limits to balances on revolving accounts. Having high limits and no balances can only help your score.

Keep the cards open, just dont use 'em.

 

It's bad in that it can limit your ability to get future credit - like for a house if you don't already have one. Mortage companies would see your $50k of credit and might refuse you more. For example, for some reason you could run up a ton of high interest credit card debt and then be unable to make the mortgage payments.

I suppose it doesn't matter if you don't need any additional lending, in which case you don't really care about your credit score anyway.

 

[QUOTE]Originally posted by Elistan
It's bad in that it can limit your ability to get future credit - like for a house if you don't already have one.

 

My 'understanding' is that it can look negative in regards to purchasing something else "BIG" because its considered 'available' credit, which means you can rack-up a big'ole bill and not be able to pay for the "BIG" thing you want...thus can be rejected.

Honestly, why bother carrying so much in credit if you don't need it?

 

Lenders look at the ratio of earnings to debts, and also potential debt. If you have a potential of an additional 50K debt and your income would not support the added load if you financed a substantially more expensive home you may have a problem getting the loan. If your debt ratio even with the added 50K of unsecured debt is within the bounds of most mortgage lenders then I wouldn't worry about it.

 

theoldman is right...(haha no pun intended)

Back when I was in college, my real estate professor was telling us how he had opened a bunch of credit cards a few years prior when we wasn't doing so well in the real estate business and was worried he may have to use this credit to get along monetarily until he could make some better commissions. Well, a couple years later he went to purchase a nice new house and the mortgage company noticed all these cards being open and they actually made him close them in order to get the mortgage.

Personnally, I would drop what you don't need, it just doesn't make sense to have it and with the potential debt you can create with these cards, creditors could become wary.

 

You might consider pulling your credit report & score from one of the credit reporting companies (Equifax, Experian, etc.). I pull mine a couple times a year. In the scoring section, it'll cover the top positive factors and the top negative factors. If they think that you have too much open credit, it'll show up there.