When can I have an overdraft please?

berkshirebowman

Have spent the last 6 months or so trying to repair my credit rating, and thinks are on the up, was at 327 on xmas eve and 530 this morning:beer:, now, I do not want a massive overdraft, I have lived without it for the last 5 years, BUT, I tend to run out of money towards the end of the month, and end up paying bank charges, which result in me running out of money the next month and so on... Anyway, discussed with HSBC a couple of weeks ago an overdraft and they turned me down flat, until my credit score improves... my question is where does my score have to be before it is worth me re-applying? I am assuming that applying for an overdraft is like applying for a bank loan and if I apply too much this will have a diverse affect on my credit score?

opinions4u

berkshirebowman wrote: »

I have lived without it for the last 5 years, BUT, I tend to run out of money towards the end of the month, and end up paying bank charges, which result in me running out of money the next month and so on...

So if if the bank allows you an overdraft, the only possible result is that the amount you are overdrawn by each month goes up forever leaving you thousands of pounds in debt. You are spending more than you earn. The bank can see this. Every bank charge you get makes you less likely to qualify for an overdradft facility.

Spend less money. Then you won't feel that you "need" an overdraft.

Don't "aspire" to an overdraft.

Live within your means.

Genuine question, why do you want an overdraft and debt?

CLAPTON

berkshirebowman wrote: »

Have spent the last 6 months or so trying to repair my credit rating, and thinks are on the up, was at 327 on xmas eve and 530 this morning:beer:, now, I do not want a massive overdraft, I have lived without it for the last 5 years, BUT, I tend to run out of money towards the end of the month, and end up paying bank charges, which result in me running out of money the next month and so on... Anyway, discussed with HSBC a couple of weeks ago an overdraft and they turned me down flat, until my credit score improves... my question is where does my score have to be before it is worth me re-applying? I am assuming that applying for an overdraft is like applying for a bank loan and if I apply too much this will have a diverse affect on my credit score?

Sadly, if you run out of money at month end and then get charged fees etc. then you really need to learn to budget... thinks of all that money you have wasted in paying fees to the bank , just madness.
a good budget planner is
http://www.makesenseofcards.com/soacalc.html

also start to keep a spending diary and write down everything you spend and find out exactly where your money is actually going.

then start to save a little money so you have a useful buffer and then you never run out and so never need OD or loans or pay bank charges.

PARIS_5000

Hsbc give their customers a behaviourial score of 0-99 every month and to have a overdraft your behaviourial score needs to be 50+. You need to worry about this not the credit score from the credit reference agencies.if you are paying bank charges your behaviourial score would be very low which is why they are saying no to the overdraft.

I would run my account well for 6 months and check behaviourial score every month until it is at least 50.

Good luck.

berkshirebowman

opinions4u wrote: »

So if if the bank allows you an overdraft, the only possible result is that the amount you are overdrawn by each month goes up forever leaving you thousands of pounds in debt. You are spending more than you earn. The bank can see this. Every bank charge you get makes you less likely to qualify for an overdradft facility.

Spend less money. Then you won't feel that you "need" an overdraft.

Don't "aspire" to an overdraft.

Live within your means.

Genuine question, why do you want an overdraft and debt?

"now, I do not want a massive overdraft, I have lived without it for the last 5 years, BUT, I tend to run out of money towards the end of the month, and end up paying bank charges, which result in me running out of money the next month and so on..."

as stated in my post, the last thing I want is to run up debts, my problem is that, as I have been trying to pay off debt, I have no savings... now, if my cars breaks down / boiler blows up at home...etc, I have no way of sorting this... I am not asking for the bank to throw thousands of pounds at me, I just want to be in a position that, if I NEED money for emergencies, it is there.....

opinions4u

berkshirebowman wrote: »

"now, I do not want a massive overdraft, I have lived without it for the last 5 years, BUT, I tend to run out of money towards the end of the month, and end up paying bank charges, which result in me running out of money the next month and so on..."

as stated in my post, the last thing I want is to run up debts, my problem is that, as I have been trying to pay off debt, I have no savings... now, if my cars breaks down / boiler blows up at home...etc, I have no way of sorting this... I am not asking for the bank to throw thousands of pounds at me, I just want to be in a position that, if I NEED money for emergencies, it is there.....

Ok, but if, as you state, you are running out of money every month I am struggling to see how you will ever be able to repay an overdraft should you "need" to dip in to it for emergency expenditure.

If you really do want to puruse this route, the best way to improve your rating with your bank is to run your account well for an extended period of time and not get charged. Every charge will effectively knock you back to step 1 again.

Remember, overdrafts are repayable on demand - the bank can call the debt in without giving you notice.

I have seen this too many times though - people stretch their salary, get an overdraft, use it to the limit, increase the limit and the cycle goes on.

The situations you have highlighted are all about spending more money than you earn.

Clapton's post above (#4) offers some genuine ways to help budget better. Perhaps more practical than a "spend less" message. But the realties of life are that cars break down, boilers stop working and repairs have to be funded somehow. Much better if you can get yourself in to a position where you anticipate these things and are able to use your own cash, that you've saved in the good months, rather than borrowing it.

Good luck.

gazelle8760

berkshirebowman wrote: »

Have spent the last 6 months or so trying to repair my credit rating, and thinks are on the up, was at 327 on xmas eve and 530 this morning:beer:, now, I do not want a massive overdraft, I have lived without it for the last 5 years, BUT, I tend to run out of money towards the end of the month, and end up paying bank charges, which result in me running out of money the next month and so on... Anyway, discussed with HSBC a couple of weeks ago an overdraft and they turned me down flat, until my credit score improves... my question is where does my score have to be before it is worth me re-applying? I am assuming that applying for an overdraft is like applying for a bank loan and if I apply too much this will have a diverse affect on my credit score?

Hi

These Credit Scores are a con!!

If my Score is anything to be believed, I should have nothing. Your score looks impecable compared to mine, and I seem to be able to get most things I apply for, and things that I don't apply for, eg: I applied for a Lloyds TSB account in April, with NO overdraft, yet they gave me an instant overdraft and Credit Card as part of my application, I also applied to Nationwide for their Flex Account, with NO overdraft, now a week after they loaded an overdraft on and gave me their Credit Card, so how banks view this is a mystery only they understand, and at that time, I wasn't going to use either account for my Salary, now I pay it into Nationwide, as they gave me the most facilities.

A word of caution though, if your short of money towards the end of the month, having an overdraft isn't really going to sort out your problems, whilst it avoids the charges for an unauthorized borrowing, it still means you are having to rely upon that month after month, so in reality your replacing one lot of unauthorized borrowing, for authorized borrowings, and still not addressing why your running out of money towards the months end.

Overdrafts are very nice and very handy, but remember, they can be removed as fast as they are put on, and imagine if your into that overdraft at the end of the month, and it is suddenly pulled, what kind of situation would you then face the month after? Consider your options first, as an overdraft may not be the solution you are really looking for! Good luck, The Gazelle.

Goody67

Hi there,
First time poster looking for some info.
Has anyone recently had their overdraft cut by their bank, specifically the Abbey.
I had my overdraft cut by £300 in a single month with no explanation. I have been to the branch (twice) and made 14 phone calls to Abbey including 5 so far to the Customer Complaints Dept. and no one has been able to give me an explanation as to why this action has been taken. I have checked my credit files and they are fine, I have had no untoward transactions and my income to the account has remained stable.
Has anyone else come across this or any advice you could give me??
Adrian.

gazelle8760

Goody67 wrote: »

Hi there,
First time poster looking for some info.
Has anyone recently had their overdraft cut by their bank, specifically the Abbey.
I had my overdraft cut by £300 in a single month with no explanation. I have been to the branch (twice) and made 14 phone calls to Abbey including 5 so far to the Customer Complaints Dept. and no one has been able to give me an explanation as to why this action has been taken. I have checked my credit files and they are fine, I have had no untoward transactions and my income to the account has remained stable.
Has anyone else come across this or any advice you could give me??
Adrian.

Hiya

Overdrafts can be decreased if they are not being used perhaps, Banks may check accounts at random periods and see that an agreed overdraft has not been used, and perhaps feels that the individual has not or is not likely to take full advantage of it, and perhaps it is not likely to be a money making scheme for them, so they reduce it. You did not state the original overdraft amount, but say it was cut by £300, so has this left you with just a small limit now?

Banks are not obliged to give reasons for their actions, if an overdraft has come up to it's review period, they can do one of three things, remove it, increase it or decrease it. They are more likely to decrease or remove if as said above, it's not been utilized in a way that makes the bank money, or an individual has a change in circumstances which wasn't relevent at the time it was granted, but as you don't go into specifics, then it is hard to pin-point an exact reason, if all else seems OK, as you state it does, then it is merely a banks decision to reduce accounts as and when they feel, and if this is the case, all you can do is appeal, if your not successful, you either move banks, or live without it.

Good Luck, The Gazelle.