Would a £1,000 overdraft-repayment loan affect my 'credit score'?

Eoin_McLove

I need to reduce my £2,000 overdraft to £1,000 in the next month before the interest kicks in (I have a graduate account). I've worked out that the best and cheapest way for me to do this is to get a 'Natwest Overdraft Repayment Plan', which enables me to borrow the £1,000 interest-free over three years - a repayment of £27.78 per month for three years; much cheaper than sticking the overdraft on 0% credit cards and continuously balance-transferring (and thereby incurring BT fees each time!) every six or nine months.

My only concern is that this may affect my ability to get another (necessary) loan this October. In October, I need to get an £8,000 loan to use to pay off my expensive Career Development Loan, whose repayments begin in November. Do you think having the Natwest Overdraft Repayment Plan (i.e. a Natwest 0% loan, albeit only £1,000) would affect my chances of getting the £8,000 loan (probably from Northern Rock)? I don't want to get this overdraft repayment plan if it means that I will be refused the £8,000 loan in October!

My current 'credit score' is, I believe, good: no late payments, etc. I have an Egg Card (hasn't been used yet), a Natwest Mastercard (no outstanding balance; rarely used; will probably cancel this very soon), and of course the Career Development Loan, which is still in its thirteen-month 'repayment holiday' until November.

Thanks for the advice.

grumbler

Any available and used credit reported to CRAs affect your credit rating. If you move £1000 from the overdraft to the loan and ask your overdraft limit to be reduced by £1000, neither available nor used credit changes. IMHO doing this now cannot affect your credit scorring in October.
If getting this loan involves credit search, it can slightly affect your credit rating for a few months.

jonesMUFCforever

Without knowing what a 'Natwest Overdraft Repayment Plan' is I would question why any bank would want to give you an interest free loan after you have had student and graduate terms.
To me it sounds like your account might go to a collections centre and if so this could well have an adverse effect on your future credit rating.

Eoin_McLove

I suppose the obvious answer would be that Natwest wants to keep my - and its other graduates' - custom. It is a little odd though, I must say.

What's a 'collections centre'?

This is the info on the repayment plan, so I'd be grateful if you had any other thoughts about it. http://www.natwest.com/personal02a.asp?id=PERSONAL/BORROW/LOANS/GRADUATE_LOAN/INTEREST_FREE

grumbler

A 'collections center' is some department dealing with problem debts. Before posting my answer I checked (ejons999, don't forget about Google ) what 'Natwest Overdraft Repayment Plan' is. IMHO this has nothing to do with problem debts and damaged credit rating.

Eoin_McLove

Thanks grumbler, you've put my mind at ease. Looks like I'll go ahead with this repayment plan now then.