How To Increase Overdraft And Help With Credit Checks

mleonard79

Hi there,

I got my mum to apply for an A&L account for the quidco cashback, refer a friend money and mainly so she could get an interest free overdraft for a year that she could use instead of credit cards. However after getting the welcome letter in this morning they've only given her a £450 overdraft which is pretty small. I thought they could give up to £2500 so I was at least expecting £2000. I phoned them up and they said they would match any overdraft she has on her RBS current account. I thought fine as I was under the impression that was £2000 anyway but it's only £1000. Better than £450 but still not as good as we'd hoped. So we phoned RBS and they said as a longstanding customer (nigh on 40 years!) with a great credit history it shouldn't be a problem increasing the overdraft. Of course she's not going to use the RBS one as it's at 15.9% odds but if she has it there A&L will have to match it. The only problem is it will mean another credit check and she's had 2 credit check within the past 2 weeks (She def got credit checked for a remortgage I've been organising and I think she would have been credit checked for the A&L overdraft facility - correct me if I'm wrong!) So my main question is will a third check affect her credit rating badly or is it worth going for to get the higher interest free rate off A&L?? I'm not too clear on credit checking and how many times is ok as I try to space them out as much as possible.

As an aside I'm also about to apply for a CC in my name but as it's the same address would that count as 4 credit checks in 2 weeks or is it completely seperate as it's in my name and not my mum's like the other ones are??

Thanks a lot for any help and advice.

M_Thomson

mleonard79 wrote:

Hi there,

I got my mum to apply for an A&L account for the quidco cashback, refer a friend money and mainly so she could get an interest free overdraft for a year that she could use instead of credit cards. However after getting the welcome letter in this morning they've only given her a £450 overdraft which is pretty small. I thought they could give up to £2500 so I was at least expecting £2000. I phoned them up and they said they would match any overdraft she has on her RBS current account. I thought fine as I was under the impression that was £2000 anyway but it's only £1000. Better than £450 but still not as good as we'd hoped. So we phoned RBS and they said as a longstanding customer (nigh on 40 years!) with a great credit history it shouldn't be a problem increasing the overdraft. Of course she's not going to use the RBS one as it's at 15.9% odds but if she has it there A&L will have to match it. The only problem is it will mean another credit check and she's had 2 credit check within the past 2 weeks (She def got credit checked for a remortgage I've been organising and I think she would have been credit checked for the A&L overdraft facility - correct me if I'm wrong!) So my main question is will a third check affect her credit rating badly or is it worth going for to get the higher interest free rate off A&L?? I'm not too clear on credit checking and how many times is ok as I try to space them out as much as possible.

As an aside I'm also about to apply for a CC in my name but as it's the same address would that count as 4 credit checks in 2 weeks or is it completely seperate as it's in my name and not my mum's like the other ones are??

Thanks a lot for any help and advice.

Hi, Your credit history will be seperate from your mum's as long as you do not have any joint financial products. One more credit check should be ok as long as your mum does not apply for any other credit within the next 6 months. There is one problem I can forsee, A & L may question that she only just had her overdraft increased with RBS. When they match the overdraft, they will ask to see three months bank statements.

mleonard79

Hi M Thomson,

I hadn't thought of that but I don't think it'll be a problem as A&L only ask for one month's bank statement and only if it shows the overdraft amount on it which RBS bank statements don't do so sending them a bank statement wouldn't work. What I need instead is a letter from RBS saying what my overdraft is - I don't think they need to put on it how long it's been at that figure however Well I hope so anyway - I'm assuming I can ask them to put on it what I like. As for more credit checks - no I'd be making sure that's the last credit check she gets for the rest of the year, I've got her cc balances on cap 1 til next sept so really she shouldn't need another check til then. Thanks.

Michelle

techno_geek

I was under the impression that once you have had an initial credit check for your current account, your bank will base your overdraft availablility on internal credit scoring.

AFAIK banks only let the Credit Reference Agencies (Experian, etc.) know what your Overdraft is so it can be recorded whether you are in-debt or not. I don't believe it counts as a full credit check whenever you increase your agreed overdraft, although it is recorded if you go over your agreed limit/default on it. Can anyone actually confirm this?

M_Thomson

techno_geek wrote:

I was under the impression that once you have had an initial credit check for your current account, your bank will base your overdraft availablility on internal credit scoring.

AFAIK banks only let the Credit Reference Agencies (Experian, etc.) know what your Overdraft is so it can be recorded whether you are in-debt or not. I don't believe it counts as a full credit check whenever you increase your agreed overdraft, although it is recorded if you go over your agreed limit/default on it. Can anyone actually confirm this?

It depends on the bank, some will offer limit increases without credit checking, some won't.