Repeated use of authorised overdraft

thebillpayer

Hi,

Not sure if this is the right place for the topic at hand, feel free to move it if not.

I live with several others in a house share and our rent comes out in a single monthly standing order from an account in my name. Frequently the other tenants are late with their portion of the rent which means the shared account's authorised overdraft of £1500 has to be dipped into in order for the payment to be made.

Obviously I am charged interest whenever this happens, but I am more concerned about the possibility of this affecting my credit rating.

Does repeated use of an authorised overdraft affect your credit rating? All of my other accounts are in order and I have savings worth a lot more than £1500 in other accounts with the same bank that the frequently overdrafted (real word?) account is managed by. I also have a credit card which I use regularly and pay back on time.

Thanks!

Lokolo

No it won't. It will just cost you pennies (unless its 0%)

Hereward

Why haven't your house mates set up standing orders to pay their part of the rent on time? I'd start charging them a little extra if they are regularly paying you late so that they are feeling the pain of the overdraft and not you.

The fact that you are regularly using your overdraft (and paying it off quickly) might actually help improve your credit rating.

Fiddlestick

thebillpayer wrote: »

I live with several others in a house share and our rent comes out in a single monthly standing order from an account in my name. Frequently the other tenants are late with their portion of the rent which means the shared account's authorised overdraft of £1500 has to be dipped into in order for the payment to be made.

Would the landlord charge you a late fee if you didn't pay the rent?

If so, charge that same fee to your slack flatmates.

paulmcerlean

No affect to your credit rating. Just the interest payable (calculate the costs of your friends late payments in terms of how much you pay in interest, could work out to be a lot over the year).

HappyMJ

Lokolo wrote: »

No it won't. It will just cost you pennies (unless its 0%)

Pennies...you've got to be kidding. £1,500 borrowed for 1 week at 12.94% costs £3.75 per week. That's a lot of pennies.

Lokolo

HappyMJ wrote: »

Pennies...you've got to be kidding. £1,500 borrowed for 1 week at 12.94% costs £3.75 per week. That's a lot of pennies.

I was going to assume that the OP is only "dipping" into it, not using the OD fully I would be very surprised if the rent is £1500 a month ...

Fiddlestick

Lokolo wrote: »

I would be very surprised if the rent is £1500 a month ...

I wouldn't.

For a shared student house - and assuming there are four bedrooms with four people sharing - it could easily be £1500 a month.

It could easily be far, far higher depending on the area.