Credit rating fear!

mtr4

Hi all,

Me and my partner are looking to buy a house in a couple of years time, so have gone through my accounts, trying to work out where I can cut off cash to put more towards a depost. I used to bank with Lloyds and when I logged on I found out that I was in my (agreed) overdraft and have been for 6 months now to the tune of approx £600. My main account (where all wages go now) is perfectly healthy and havent been in my overdraft, my ISA is fine and healthy. I'm going to put over £75-£100 to pay off the overdraft but will this time affect my credit rating? I signed up to Experian but now I have to wait 5 days to see what my score is like with them, but it doesn't stop my panicing!!

Any ideas if it will be badly affected?

ACG

Its an agreed overdraft.

Pay it off and you will be fine. Lenders will probably not be too impressed you have been in your overdraft for 6 months, but you will only be sending bank statements in for your main bank account presumably?

So get it to a nil balance and you shouldnt have anything to worry about. Unless your applying with lloyds i dont think they will be able to see the balance on your account at any time prior to your credit check being done (Just make sre your credit file updates with the correct balance before you apply).

MagicCats

It won't affect your credit 'rating' in terms of having an instant negative effect, such is the case with late payments, defaults etc. However why have an ISA and a £600 overdraft? It makes no sense? You'll be paying more interest on the o/d than you make on the ISA. I'd clear it now.

As for it having a negative impact with a mortgage will depend on the underwriter assessing your case. They may ask why bother saving when you have an O/D, or they may see it as convenience. Still, best thing to do is clear it.

As for credit 'score' or 'ratings' provided by Credit Reference Agencies; ignore these. The only 'score' that matters is the one the credit provider gives you when assessing your application.

MiniSis

I have 3 bank accounts, my account my wages go into which is healthy, my graduate account which was being paid off then I had a baby and it hit back up and am now paying it off (down to £1400 haha!) and my old Barclays account which I have been paying the od off on and off for the past 8 years. All accounts have been within agreed limits and show on my credit check but I was not asked about them. I am now making a conscious effort to pay them off asap!!! (this is because I have finally grown up and taking responsibility to clear everything and not bury my head!!)