Overdraft Query..

James1980

Hi All,

Unsure if I have posted this in the correct section, I have noticed a few times on reading the boards about people saying they are always in their overdraft etc.

I was just wondering, if when going for a mortgage or a loan, is you are always in your overdraft even by only a couple of pennies each month can this have a negative impact on your Credit Score, even if the Overdraft is an approved overdraft.


Thanks.
James

Tixy

It certainly is a factor and in some cases could be enough to tip things to a rejection. As it looks like you cannot manage on your salary each month. Equally some lenders don't seem to mind much.

Mortgage providers generally have a slight preference for debt to be on a fixed repayment loan rather than on revolving credit such as a credit card or on an overdraft.

stephane_2

It all depends how it is reported on your credit report....if it shows that you are dipping in it every month then yes it will have a detrimental effect when trying to get new credit wether the overdraft is an arranged one or not....

FireWyrm

Ive been resident in my overdraft for nearly a decade and still managed to secure two mortgages in that time. It never seems to matter apparently. What does matter however is the 'unsecured credit' on cards or store cards.

James1980

Hi All,

Thanks for the advise..

so best be in the overdraft than in debt on the credit/store cards

FireWyrm

I wouldnt say that. Neither is a very good place to be, especially as the bank could call the overdraft in at any moment and you have no choice but to settle it.

However, from my limited experience, it doesnt seem to have impacted on my ability to gain a mortagage yet.

James1980

but i mean my overdraft is quiet large, I am only into it by a couple of pounds at the minute would probably be saving a lot more interest wise going into it by a few hundred if means getting a credit or store card cleared.