Minimising Overdraft Hurt Credit Score?

KyleCarey

Hi

My partner has an Overdraft of £1,450 which she has recently paid off and is wanting to close or minimise this.

Will it hurt her credit score if she was to just close the overdraft completely ... will then lenders know it was her that closed it or would they think the bank has taken it away from her?

Any advice will be great.

Thanks

K

[Deleted User]

They could think either, or they could not care. Each lender will have their own view on it.

DCFC79

It may hurt her credit score but lenders don't see the score so its pointless worrying about the score.

CLAPTON

KyleCarey wrote: »

Hi

My partner has an Overdraft of £1,450 which she has recently paid off and is wanting to close or minimise this.

Will it hurt her credit score if she was to just close the overdraft completely ... will then lenders know it was her that closed it or would they think the bank has taken it away from her?

Any advice will be great.

Thanks

K

makes sense to have an overdraft facility just in case of an miscalculation or emergency but aim never to use it
why does she want to close it?

Superscrooge

If the overdraft facility is free then I would keep it just in case you ever need it. But if you have to pay even if you don't use it, then I would close it.

My bank gave me a free £5,000 overdraft facility. I don't anticipate ever using it. But I keep it because it isn't costing me anything and it's always there should I need it.

ElkyElky

I'm willing to put my money on lenders not giving a care in the world. They'll see if the overdraft has been paid off, whether in a lump sum or by monthly payments and that alone will put her in good standing.

Removing the overdraft is neither here nor there, it'll reduce her overall exposure however. Future lenders would have no reason to assume the overdraft has been withdrawn by the bank in this situation. Even if it was withdrawn by the bank, future lenders won't know or even care unless there are negative marks against it.

If she wants to remove the overdraft then do so without fear, at least to remove the temptation of going back in to it. If she'll think it will be handy for bills that come out before payday or unexpected payments, keep it as a safety net (even if it's just a few hundred).

People worry too much about how lenders will perceive certain actions they make that would cause any alteration to their credit history - an irrational worry in my opinion.

KyleCarey

ElkyElky wrote: »

I'm willing to put my money on lenders not giving a care in the world. They'll see if the overdraft has been paid off, whether in a lump sum or by monthly payments and that alone will put her in good standing.

Removing the overdraft is neither here nor there, it'll reduce her overall exposure however. Future lenders would have no reason to assume the overdraft has been withdrawn by the bank in this situation. Even if it was withdrawn by the bank, future lenders won't know or even care unless there are negative marks against it.

If she wants to remove the overdraft then do so without fear, at least to remove the temptation of going back in to it. If she'll think it will be handy for bills that come out before payday or unexpected payments, keep it as a safety net (even if it's just a few hundred).

People worry too much about how lenders will perceive certain actions they make that would cause any alteration to their credit history - an irrational worry in my opinion.

Thanks for the info, she has decided to reduce it but leave £150 as a safety net kind of thing.

Reason for removing it in the first place was to stop temptation of going into it!

K