Should I Close Credit Cards Before Applying for a Mortgage?

The Case for Keeping Credit Cards Open

Open credit card accounts with low balances contribute positively to your credit profile in several ways. They increase your total available credit, which keeps your credit utilisation ratio low. They also demonstrate an ongoing track record of responsible credit management.

Older credit card accounts are particularly valuable. The length of your credit history is a factor in your credit score, and closing a long-standing account shortens your average account age. If you have a credit card you've held for ten years with a clean payment record, that's working in your favour.

When Closing Credit Cards Makes Sense

There are some situations where closing credit cards before a mortgage application can help. If you have numerous open accounts — say five or more credit cards — lenders may worry about your total available credit, even if you're not using it. The concern is that you could potentially run up significant debt at any time.

Closing cards you never use, particularly newer ones with no meaningful history, can tidy up your credit profile. If any cards carry annual fees and you don't use the benefits, closing them also makes financial sense.

How to Handle Credit Card Debt Before Remortgaging

If your credit cards carry balances, focus on paying them down rather than closing the accounts. Aim to reduce each card's utilisation to below 30% of its limit. If you can clear them entirely, even better — but keep the accounts open afterwards.

Lenders will factor your credit card minimum payments into their affordability calculations. By reducing your balances, you're both improving your credit score and increasing the amount a lender is willing to let you borrow. Pay the balances down at least two months before applying so the lower figures appear on your credit file.