Should You Close Credit Cards Before Applying for a Mortgage?
- Ben Stephenson
- Aug 4
- 5 min read
Applying for a mortgage is one of the biggest financial steps you’ll take, and how you manage your existing credit accounts can have a direct impact on whether you’re approved – and on what terms. A question we’re often asked is:
“Should I close my credit cards before I apply for a mortgage?”
At first glance, it might seem sensible to reduce the number of open credit lines, thinking this will make you appear more financially stable. But as with many areas of mortgage preparation, the truth is more nuanced. Closing a credit card could have benefits in certain circumstances, but it could also temporarily lower your credit score or raise questions from a lender if not done strategically.
Whether you’re a first-time buyer mortgages applicant or someone planning to remortgage, this guide will help you understand the pros and cons of closing cards, how it affects your credit file, and the best approach in the run-up to your application.
Why would someone close a credit card before a mortgage?
There are a few common reasons people consider closing a credit card before applying for a mortgage:
Reducing temptation – Some applicants prefer fewer open accounts to avoid overspending during the mortgage process.
Tidying up their credit report – Old or unused accounts can seem unnecessary, and some people believe lenders prefer fewer open lines of credit.
Avoiding fees – If a card charges an annual fee, cancelling it can save money.
Preventing fraud risk – Fewer open accounts mean fewer opportunities for fraudulent activity.
While these reasons are valid in some contexts, they don’t always align with what’s best for your mortgage application. Let’s look at how lenders actually view open credit card accounts.
How do mortgage lenders view open credit cards?
Mortgage lenders look at your credit history holistically. They’re not just counting how many accounts you have – they’re analysing:
Current balances – How much you owe now.
Repayment history – Have you made payments on time?
Credit utilisation – How much of your available credit you’re using.
Length of credit history – Older accounts in good standing are a positive sign.
Recent activity – Have you opened new credit lines recently, or taken on additional debt?
An unused credit card with a zero balance and a history of on-time payments can actually strengthen your credit profile. On the other hand, multiple cards with high balances can reduce the amount you can borrow, because lenders will factor in the monthly repayments during affordability checks.
How closing a credit card can affect your credit score
Closing a card might make sense if it has high fees or you never use it – but doing it right before applying for a mortgage can have unintended consequences:
Reduced available credit – This can push up your utilisation ratio, which can lower your credit score.
Shortened average account age – Closing an older account can reduce the length of your credit history, another factor that can impact your score.
Loss of positive account data – Once an account is closed, it stops contributing ongoing positive payment history.
A small drop in your score might not seem significant, but if you’re close to a threshold between score categories, it could affect the rates you’re offered.
Pros and cons of closing a card before a mortgage
Pros:
Removes temptation to spend on that card.
Reduces the risk of future debt on that account.
Saves on annual or maintenance fees if applicable.
Cons:
Possible drop in credit score from higher utilisation.
Loss of long-standing positive account history.
Reduced number of active accounts reporting positive activity.
Practical steps for managing cards before a mortgage
Focus on balances, not closures – Paying down existing balances will have a more positive effect than closing accounts.
Keep older accounts open – Especially those with long histories of on-time payments.
Avoid new credit applications – These can temporarily lower your score.
Check your credit report – Make sure all details are accurate well before applying.
If closing, do it early – Close accounts at least 6–12 months before applying to allow your score to stabilise.
Common misconceptions about closing cards
Many mortgage applicants believe:
“Fewer cards equals less risk” – Not always. Lenders judge based on management, not quantity.
“Closing unused accounts boosts my score” – In most UK scoring models, it can lower your score temporarily.
“If I close it, it disappears from my file” – Closed accounts stay on your file for up to six years.
“I should close all old cards before applying” – Closing the oldest card is often the worst choice for your score.
Two different approaches
Emily’s story: Emily, a first-time buyer mortgages client, had two cards – one long-standing with no balance, and a newer one with a small balance. She cleared the newer card and closed it right before applying for a mortgage. This reduced her available credit and slightly increased her utilisation on the remaining card, causing her score to drop from “Excellent” to “Good”. She still got approved, but the closure didn’t help her case.
Jack’s story: Jack had four cards with small balances. Instead of closing any accounts, he focused on paying each down to zero while keeping them open. This kept his utilisation low and maintained his long credit history. His application process was smooth, and he got the rate he was hoping for.
FAQs
Should I pay off all my cards before applying?
Yes, if possible. Zero balances look best, but low balances are fine if affordable.
Will closing a card help my score?
Usually not in the short term – it can cause a dip due to reduced available credit.
Do lenders mind multiple cards?
Not if they’re well-managed with low or zero balances.
When should I close a card?
Only if necessary, and ideally well before applying or after your mortgage completes.
Is it harder to get a mortgage with card debt?
It can be if the debt is high compared to your income, as repayments reduce your borrowing capacity.
Should I avoid using cards while applying?
Avoid large purchases or new debt. Small, regular use that’s repaid quickly is fine.
How a Mortgage Broker Can Help You Manage Credit Cards Before a Mortgage
When deciding whether to close credit cards before a mortgage application, having a knowledgeable mortgage broker on your side can make all the difference. An experienced broker will not only look at your current credit situation but also anticipate how different actions will impact your application in the eyes of lenders.
A broker can:
Assess your overall profile – They’ll review your credit reports, income, outgoings, and existing commitments to give you tailored advice on whether closing or keeping certain cards is in your best interest.
Advise on timing – They can tell you if it’s better to close a card months in advance, after your mortgage completes, or to leave it open entirely.
Spot potential pitfalls – Brokers are familiar with lender criteria and can warn you if a sudden change to your credit profile could trigger extra checks or delays.
Guide your debt reduction strategy – They’ll help prioritise which balances to clear first for maximum impact on your affordability assessment.
Provide reassurance – For many borrowers, peace of mind comes from knowing a professional is checking every decision against how lenders will interpret it.
Written by Ben Stephenson, CeMAP-qualified Mortgage Broker, Manor Mortgages Direct