Increasing Overdraft Limit and Credit Score/Checks

Wraggy

Hi. I have a Halifax Student account at the moment, and I was wondering whether me asking for a bigger interest free overdraft requires a credit check (and be recorded on my credit record). I asked to increase my current overdraft limit a few months ago, but I wasn't successful, and I was wondering if asking again was a bad idea if it would go down on my credit report. Thanks for any help!

Lokolo

If you keep asking then yes it will go down as something bad because it looks like you're desperate for money, and so banks don't want to lend to desperate people.

Increasing overdrafts will involve a credit check yes.

Innocent_Guy

Askif they have a pre-approval scheme I am pretty sure they do

b3nton

Get another account with a different bank
Not a student account though, you're not allowed.

rb10

b3nton wrote: »

Get another account with a different bank

Eh? That will require a credit check ... which is exactly what the OP is trying to avoid!

kaisersoze_2

My bank (Intelligent Finance) dont credit check me for increasing my overdraft limit, maybe they use internal scoring.

jambosans

kaisersoze wrote: »

My bank (Intelligent Finance) dont credit check me for increasing my overdraft limit, maybe they use internal scoring.

IF is owned by The Lloyds Banking Group, inherited from HBOS. I think overdraft recommended limits are set by using a combination of both - internal and external credit checks. On top of the bank keeping an internal score based on account conduct I have heard that most banks update your score with a monthly external check. Perhaps someone can clarify?

Gumption_Brash

Can't really say for Halifax, but generally speaking most banks will use their own internal system for whether they give you an overdraft/extension. I know this having worked in a bank half a year ago...

Typically 'backwards in coming forwards' , this is largely based on how much you keep in the bank...yup to get an overdraft they want too see you with a consistent, healthy bank balance. Other factors include how much you earn and what outgoings you have.

As an example, I used to take out all my funds leaving just enough for DD, based on my earnings they allowed for an overdraft of £400. They would not go any higher...but now that I have about a grand in the bank they can offer me an overdraft of £800. This is with Clydesdale.

firsttimestudent

No, Halifax doesn't do credit checks for student overdraft increases (from my experience in March - increased from 2750 to 3000).

To the OP: The computer screen will always say 1000 pre-approved. You'll need to ask the staff to contact the overdrafts department on your behalf (some staff do not know this, and will just say 'computer says no')

dc110

Typically 'backwards in coming forwards' , this is largely based on how much you keep in the bank...yup to get an overdraft they want too see you with a consistent, healthy bank balance. Other factors include how much you earn and what outgoings you have.

As an example, I used to take out all my funds leaving just enough for DD, based on my earnings they allowed for an overdraft of £400. They would not go any higher...but now that I have about a grand in the bank they can offer me an overdraft of £800. This is with Clydesdale.

Possibly this is how it works with Halifax (I dont work for them so cannot be sure) but i think you have oversimplified it.

Typically an overdraft will be granted based on affordability so regular credits into an account will indicate affordability of the customer to repay the overdraft - not necessarily a healthy balance.

I can make regular credits into my account without ever having a "consistently healthy balance".

Gumption_Brash

dc110 wrote: »

Possibly this is how it works with Halifax (I dont work for them so cannot be sure) but i think you have oversimplified it.

Typically an overdraft will be granted based on affordability so regular credits into an account will indicate affordability of the customer to repay the overdraft - not necessarily a healthy balance.

I can make regular credits into my account without ever having a "consistently healthy balance".

Ooops. Yup, affordability would be a more concise way of looking at it.

- 'regular credits into an account' however, are a given. And by that I think you mean your paycheque or other regular income? That IS one factor, however only up to a point. High overdrafts are based on more criteria.

Going back to the 'affordability' factor, this is judged by the amount of money you don't touch in your bank account.

To clarify: by a healthy balance I mean that if you take every last penny out they will presume that you're less likely to be able to afford the overdraft. Certainly as opposed to someone who leaves at least some of their income/paycheque in, month by month.

-Hope that's clearer.