Clear a loan with an overdraft so it looks settled on credit report?

aartisuk

Hello all

I currently have an overdraft which i'm slowly paying of, and a loan of 470 which I am also paying off.
I was wondering whether it would be a logical idea to use my overdraft to clear my loan, so that it appears settled on my credit report. Any ideas as to how this would look? Is this a good idea? I'm really not sure!

Thanks

Hazzinho

Is the interest better on your overdraft? All your doing is moving the debt to your overdraft so you still have the same debt.

aartisuk

Its no interest on either until december, so I'm hoping to pay both of before then regardless. It's because I'm looking at getting a decent credit card. Will this help?

ChopperST

Living in your overdraft is a red flag to lenders and will dampen your ability to get credit. Paying an interest free loan on time every month will be a green tick in your file so keep doing it. I'd clear the O/D ASAP not the other way round.

When you say a "decent" credit card what do you mean?

I'd say a decent credit card is one that gives me cashback on my purchases.

Do you mean a decent credit card so you can buy things on credit you can't afford?

aartisuk

Essentially I've never had a credit card before. Experian credit rating gave me a fair credit rating, and as i'm trying to get my financial affairs in order I think I ought to get a credit card soonish so that when in about 3 years time I go to the bank to get a mortgage, they're willing to give me one.

I certainly do not want to get a credit card to buy things I can't afford, I was planning to use to mainly for grocery shopping, I'd like to get a credit card with some benefits, but truthfully as a first timer I don't know if that'll be a possibility.

Thanks for your advice, I will keep them separate

forgotmyname

Just spend as little as possible and pay the loan off ASAP.

ChopperST

aartisuk wrote: »

Essentially I've never had a credit card before. Experian credit rating gave me a fair credit rating, and as i'm trying to get my financial affairs in order I think I ought to get a credit card soonish so that when in about 3 years time I go to the bank to get a mortgage, they're willing to give me one.

I certainly do not want to get a credit card to buy things I can't afford, I was planning to use to mainly for grocery shopping, I'd like to get a credit card with some benefits, but truthfully as a first timer I don't know if that'll be a possibility.

Thanks for your advice, I will keep them separate

You don't have a credit rating, numbers are meaningless. Just keep up your contracted payments on the loan and get the overdraft cleared ASAP i.e. before you start paying interest and get saving instead.

If you are looking at a card to build your credit file which you pay off in full every month then look at the various cashback cards in the main site.