shall I raise my agreed overdraft?

manub

I'm currently on a Barclays account, on which I've got £260 overdraft. I never used it, and I've been running my account for 1 year and 1 month. Now I see that Barclays it's offering me an agreed overdraft of £1,010. My account has 0% interest on overdraft up to £300.

I was thinking whenever I should raise my agreed overdraft. I've got only a £200 credit card, I haven't got lots of savings (less than 2k), and I was thinking of it only for emergency situations. But, I'd like to get a proper credit card in the next month (I'm on a Capital One), so I don't want to get too much credit now.

Shall I take my overdraft up to £300 (which means the 0% threshold), take it to an higher sum (let's say 500, or even the whole sum) or leave it as it is - specially for credit rating purposes? I don't see any reason why I should be using it in the future, but you never know - and £460 total credit is not good if something happens.

Thanks!

izools

If I were in your position I'd up it to £300.

Have you used the Barclaycard pre-application checker to see if you're eligible for one of those?

https://letmechoose.barclaycard.co.uk/

bengalknights

I would also take the limit if it was offered as at least you would have some headroom for emergencys if needed.

jamesd

Ask Barclays about the date at which they report your balances to credit reference agencies and whether they report the first £300 or not. Then use the £300 to put money into a savings account at a different place and return it to clear the overdraft a few days before the date they use for reporting the balance. Result: them lending you money at 0% and you making a few percent on it.

manub

I've got some issues with my Experian credit report (it's not showing my agreements), and Barclaycard use this, so I need to fix this.

Is it bad if I get it to, i.e., £500 for my future ability to get credit (card and/or mortgage)? I'm not planning to use it (I don't think I'll go for the way james said, but thanks!).

izools

Unless you're on a rediculously small income an extra £300 - £500 being available to you in terms of credit lines will not negatively affect any affordability scoring atall.

However, having an overdraft of a sensible size (£300 - £500) that lays unused all of or nearly all of the time will be a positive factor in terms of credit scoring.

I've dipped in to my Overdraft with HSBC once or twice, albeit for no more than one or two days at a time and for less than £100 when I do, and they've never reported to my credit files that it's been used on the odd occasion that it has been

manub

My income is pretty good for the standards. So you'd suggest going for all the £1000, if I don't plan to rely on it?

izools

Can't be sure seeing as I don't know your circumstances, but I personally feel £1000 to be excessive.

HSBC gave me a £1000 OD with my account and I reduced it to £500, despite being able to clear many times that with my salary each month I simply didn't need any OD and thought £500 sensible. But it's all proportional dependant on your income.

In my case, my O/D limit is a quarter of my NET monthly income, so perhaps set yours at one quarter of your NET monthly income?

manub

No, I'd wish to earn £4000 net a month

I think I'll go for £500, it's a good tradeoff (that £500 is less than a quarter of my monthly net income).

Thanks a lot.

izools

manub wrote: »

No, I'd wish to earn £4000 net a month

I think I'll go for £500, it's a good tradeoff (that £500 is less than a quarter of my monthly net income).

Thanks a lot.

Lol, sorry, I mean £500 was about 1/4 of my NET monthly :P LMAO, I'd wish to earn £4000 net a month, too!