Overdraft + credit rating

Elvisia

If I go into my overdraft, does this affect my credit rating?

Essentially my dad is extremely ill so my mum and I are sorting out taking over his finances, and I didn't realise they had got themselves into a bit of a mess with their accounts. They had a big credit card bill coming in, so I agreed to lend them the money to pay for it from my current account. This morning I got a big tax bill from France where I used to live, which I will have to pay then put in a claim to get it back as I am certain it's wrong (I've had this issue before). However all my money is tied up in ISAs, and since my overdraft is currently fee and interest free I'd rather take the extra money I need from that until I can get my parents' money worked out (about 2 weeks). But will it affect my credit rating? I've worked hard to keep my ISAs and I don't want to take money out unless I really have to.

dtsazza

I think it will show on your credit file that you're in your overdraft (i.e. you're using a credit product). But so long as you don't go into an unauthorized overdraft, this isn't necessarily a bad thing. It's up to individual companies how they wish to view it of course, but I'd expect them to treat it similarly to a credit card kept within its limit - which is typically considered a good way to slowly build up a credit rating, if anything.

As long as you keep your account in good standing I'd be surprised if this causes you issues - someone correct me if I'm wrong.

Saints2011

Using a overdraft over a long period of time will have a negative affect.

Overdrafts are for emergencys or just to tide you over if needs be, so in your situation I wouldn't worry about it.

Phill_Anderson

Bank overdrafts won’t affect your credit score if you resolve them within a timely manner. If you frequently overdraft your checking account, it is a sign that you are spending more money than you really have.

Elvisia

Thanks for all the replies, it should only be for a couple of weeks until Mum can get to the bank and pay back the money she owes me for the credit card bill. At least this way I won't be having to lose any of my ISA allowance! It's odd as they spent my entire life drumming into me about saving money, and now they're the ones who've overspent and I'm bailing them out.

bbfc

My HSBC overdraft never appeared on my Credit Report for the whole time i had it (it was a student account) and I was always up to the max. However an account I had with Natwest that had an overdraft (I never used the account) was listed until I closed it down.