How do lenders see o/d usage?

mum_2_ellis

Hi all,

Just a quick question - if you go into your o/d each month and then it is replaced on payday, will lenders see this is 'good' credit or that you are relying on the over draft and therefore it will have an adverse affect on your credit score.

Thanks in advance.

opinions4u

It could go either way.

Well managed debt can be seen as a positive. Especially if the highest overdrawn balance each month is decreasing month on month.

Having an overdraft where the highest balance each month is similar or increasing can be seen as a bad thing.

Different lenders can interpret things in different ways at different times as well.

BugsyBrowne

mum_2_ellis wrote: »

Hi all,

Just a quick question - if you go into your o/d each month and then it is replaced on payday, will lenders see this is 'good' credit or that you are relying on the over draft and therefore it will have an adverse affect on your credit score.

Thanks in advance.

Put it like this my missis is a spendaholic and I've never known her not to be in her authorised OD she's always 1k overdrawn.she has a barclays account And recently got herself another account with FD.
But it never seems to stop Barclays giving her PRE-approved offers.

There is this great belief that going into your Planned OD makes you some sort of high risk when it's no different to sitting on a credit card balance.

An unauthorised OD that you dip into will have a negative effect.

InsideInsurance

You have to remember that banks only update the CRA once a month and so if your pay goes in the day before they run their extracts you'll always show as never touching your overdraft to outside organisations. Obviously if it runs the day before then it'll show you are always living at the maximum

For lending requests within the organisation then obviously they can see a daily snapshot.

Each lender makes its own decisions, generally being "permanently" near the max of your OD is going to look bad to most lenders. As I pay my own wages from my company I moved my payday to a little before my bank does its run so I am never reported as being in my overdraft.