Reducing Overdraft limit - how does this affect credit rating?

kittypimms

Morning all,

As above really - Halifax upped my OD limit to £1900, on an account I've not used since October (it has £1 in it).
I'm not intending to use this account in the near future (it was a joint account, that my ex and I used to pay all the household bills), but will keep it open just in case.

If I reduce the overdraft to £500, will this negatively affect my credit rating? I know if I'm not going to use the account, there's no point in reducing the OD, but seeig that sum of "available" money bothers me!!

I need to shift to a new 0% CC in August, so want to preserve my credit rating if possible!

Thanks in advance,

casper_g

I can't see why reducing the overdraft limit would cause a problem. Potential lenders are more likely to be concerned by a large amount of available credit, as it makes it possible for you to get into difficulties!

ironlady2022

I would definitely reduce it, as it's still a joint account that is open and money up to the limit can be spent at anytime and both of you willbe liable. Reducing it from £1900 to £500 is better as it frees up more credit elsewhere if you were needing to apply for a loan or another credit card.

Sharon87

I agree reduce. Halifax upped my limit automatically, which I don't want! think of it as a good sign they trust you with that money, a good indication your credit rating is decent, so you'll be likely to get accepted for Halifax's credit card if you want to go with them (I know they do a 0% balance transfer for 9 months for existing current account customers, I got one of these)

blueberrypie

kittypimms wrote: »

As above really - Halifax upped my OD limit to £1900, on an account I've not used since October (it has £1 in it).
I'm not intending to use this account in the near future (it was a joint account, that my ex and I used to pay all the household bills), but will keep it open just in case.

1. Are you sure your ex did not request the OD increase?
2. Leaving a joint account with an ex open is foolish - if your ex takes it overdrawn *whether it is an approved overdraft or not*, you will be liable for the debt and all charges.
3. As long as you have a joint account, you and your ex will be financially associated. If your ex - or another person with whom your ex is financially linked - destroy your ex's credit rating, it will also have an effect on yours.

It would be much a much wiser move to remove your name from the account or close it completely.

Sharon87

blueberrypie wrote: »

1. Are you sure your ex did not request the OD increase?
2. Leaving a joint account with an ex open is foolish - if your ex takes it overdrawn *whether it is an approved overdraft or not*, you will be liable for the debt and all charges.
3. As long as you have a joint account, you and your ex will be financially associated. If your ex - or another person with whom your ex is financially linked - destroy your ex's credit rating, it will also have an effect on yours.

It would be much a much wiser move to remove your name from the account or close it completely.

Or remove his name, if the OP hasn't already done it. (OP says was a joint account), so may have already put it as a single account

kittypimms

blueberrypie wrote: »

1. Are you sure your ex did not request the OD increase?
2. Leaving a joint account with an ex open is foolish - if your ex takes it overdrawn *whether it is an approved overdraft or not*, you will be liable for the debt and all charges.
3. As long as you have a joint account, you and your ex will be financially associated. If your ex - or another person with whom your ex is financially linked - destroy your ex's credit rating, it will also have an effect on yours.

It would be much a much wiser move to remove your name from the account or close it completely.

Thanks for the responses guys - very much appreciated - I've called and asked them to reduce the OD. I've also asked them to send out the forms to take his name off the accounts - I couldn't do this sooner as he's been in Australia since we broke up, and they need his signature (lucky so and so!).

Fortunatley I'm on good terms with the ex, and when he moved out he left me his cards to both our joint accounts - and he doesn't know any of the security details/ logons (I may be rubbish with money, but I'm not daft )

So I will get that changed asap. Great news that it's good for my credit rating if they're trying to offer me a larger OD - hopefully things are looking up.

Thanks again for the responses - I really do appreciate it!