overdraft affect loan application?

stinkerbob

Hi

My other half was recently turned down for a loan, despite never having any problems in the past with credit. We discussed our situation with the company who were applying and they said it would be worth appealing so have asked for a statutory credit report and 3 months worth of bank statements to prove affordability.

My question is - will our overdraft have a big impact? We have a £400 overdraft but never go any further than £250 overdrawn - this is the interest free limit (I realise it would be far better to have no overdraft at all). We never have problems with running out of money each month although we do spend what we earn (aside from savings). Again, I realise this is not the best way to run our bank account - but we do tend to use the overdraft each month. Does anyone know if this is particularly bad in terms of trying to obtain credit?

Many thanks in advance for your help and advice

Tixy

Hi

If you are right up to your limit every month, or regularly going over your overdraft limit or are in it for the whole of the month (even after your wages have been paid in) then it can impact on your ability to get credit.
I would imagine from what you have put its not likely to have a huge impact. Although different lenders will place differing importance on how your run your overdraft.