Balance for current accounts on credit files

Adamsimsy

Hi

I've recently removed the overdraft limit on my account as i no longer wander into the red.

Since removing the overdraft i know have a lower score because my available credit has gone because i've removed the overdraft and my bank (Santander) record my balance as Zero.

Is this normally for current account balances to show as zero?

Surely this wouldn't look good if i apply for a credit card and i appear to have no available funds as my balance shows as zero when it really is several £K.

Can anyone shed any light? Should i complain to Santander?

Cheers.

brendon

Credit reports are for credit only. Your actual balance isn't credit, it's your money and so will not show up on a report. The balance refers to your credit balance (e.g. how much you are in overdraft).

MoneySaverLog

brendon wrote: »

The balance refers to your credit balance (e.g. how much you are in overdraft).

You mean debit balance

Adamsimsy

lol thanks for the replies guys. I guess its best to use the balance in your current account to clear down the debit you have to a creditor. So that you have more available credit which looks better.

What i'm never sure of is it better to reduce your credit limit so you don't have more than you need, or is it better to have a greater available credit with the same balance?

So £2000 with a £2500 limit, or a £2000 limit with a £5000 limit?

I found Creditexpert scores you lower if you use a higher percentage of your credit limit. When surely having the same debt with a bigger credit limit is more risky?

Tixy

In terms of what other potential lenders would look for - its really a balancing act and individual lenders have different ways of looking at this and different (unpublished) risk models.

On one side having a low limit can look like you are maxing out your credit and so struggling financially.
On the other having a high limit might show you already have access to a lot of credit and therefore may raise questions about affordability if you were to max out the existing facilities on top of whatever new credit you are applying for.

creditexpert scores can rise and fall in ways that are in no way reflective of how a potential lender would an application from you.