Impact of credit limit increase on mortgage application

[inman]

Hi All,

I have a first world problem.

I have three cards – a 0% card, a world elite MC (Halifax) and a BAPP. The combined credit limit of all three cards is around £46k. But I try to use credit cards only for specific reasons (avios, lounge access etc.), so my total balance at the moment is below £7,000 and most of it is on the 0% card.

I got a credit limit of £14,000 on the Halifax. My balance has never exceeded £1,000. In fact, the current balance on this card is around £300. Recently Halifax offered to increase the credit limit to £19,000. This will move the total credit limit to £51,000. However, my aim right now is to keep the total balance of all cards combined at £5,000 or less.

I’m also planning to apply for a mortgage this year (side note – I moved to the UK just 5 years ago).

My question is, would accepting the credit limit increase have a positive or a negative impact on the mortgage application? I’m thinking it will be positive for the credit utilisation ratio but at the same time, I’m aware that banks do stress tests as well. Or would the impact be neglegible?

I dont need the credit limit increase but would consider it if it helps the mortgage application in any way.

Thank you in advance.

[JDB]

@inman – I think it’s probably best to reject the limit increase as it’s clearly superfluous to your needs and lower credit utilisation won’t affect your mortgage application when it’s already relatively low. Your limits already look high relative to your needs/utilisation and mortgage lenders really don’t want to see large unsecured credit lines alongside their lending.