More than one overdraft and credit rating

onthewayout

Just wondering if having several overdrafts looks worse on a credit check than several credit cards?

I'm sorting out my debts, and last month I've been able to balance transfer all but one of my old credit cards to 0% deals. I wasn't approved for the last 0% card I applied for, which would have taken over the last interest-bearing balance, and I'm wondering if there's anything quick I can do to raise my chances of getting one in December. On my current pay, I normally have £300 a month to put towards debts (on top of the minimum payments).

I still have two overdrafts, one on my main account which I normally don't use, and another one which I kept because it's cheap compared to all my old cards. It's only for £200 though, so would clearing it make much difference? For another "settled" green tick on my record

And if I did that, would it matter if I kept the account open with no overdraft? I still want a spare one in case my card gets blocked on holiday.

matttye

It's not quite as black and white as that. An overdraft of £200 wouldn't look as bad as a credit card that you owed £2k on, for example.

If you've made several applications for 0% cards recently, that is likely the reason why you haven't been able to get another; as a lot of applications spooks lenders. I wouldn't bother applying for another card in December if I were you.

Things like your debt to salary ratio will matter a lot more to lenders than whether you have an overdraft vs. a credit card. So, if that £200 will make much of a difference to your debt to salary, then go ahead and pay it.

So long as you're paying everything each month and getting green ticks, you should be okay.

rb10

Don't worry about what may or may not look better to other lenders on your credit file. Each lender works differently, you'll never please them all.

Instead, concentrate on paying back the debts with the highest interest rate first.

Once they're all at 0%, work on those that have the shortest 0% period (or, if you can be disciplined, start paying into a savings account so that you can pay off the 0% at the end of the period).