Decreasing overdraft

armyoftwo

Morning All,

I have recently cleared my overdraft debt (woohoo!) And was wondering would it have an adverse affect on my credit history if I reduced the limit or even removed the overdraft?

At the moment I have £6000 on my o/d and I want to reduce it to £500.

I also have two credit cards, £10,000 limit combined. My salary is £35k PA.

Thanks for your help in advance.

X

YorkshireBoy

What are the balances on the credit cards?
And are they on 0%?

HappyMJ

Adverse affect? I wouldn't think so.

There's no harm leaving it there ...only for use in case of emergency. You wouldn't want to have an emergency and then have to apply for the overdraft back again which could be declined if you were unable to bring in an income.

armyoftwo

Hey YorkshireBoy,

The balances on one card is £3000 with 0% until Nov this Year and £2600 on the other at 15.9%.

armyoftwo

I was thinking the same HappyMJ, but my partner suggested that I could use one of the credit cards if ever an emergency cropped up.

Whats your thoughts?

YorkshireBoy

I don't think it'll matter to your credit rating whether you reduce the O/D facility or not. However, the facility is likely to cost around the same as the credit card if you were to use that for emergencies.


So on balance I'd probably reduce the facility to around £2K, which should cover a month's take home pay.


Any reason why you're paying interest on one of the cards? Can't get another?...or been generally lethargic? If you can't get another 0% BT card, will the other card do you an existing customer 0% deal (assuming you've enough headroom on there)?

armyoftwo

Thanks YB. I will reduce it down to £2k as per your advice.

With regards to the balance, I think I've been a bit lethargic tbh. I was thinking of applying for the Nationwide cc as I have a dormant account with them, but worried I could get declined.

stclair

armyoftwo wrote: »

Thanks YB. I will reduce it down to £2k as per your advice.

With regards to the balance, I think I've been a bit lethargic tbh. I was thinking of applying for the Nationwide cc as I have a dormant account with them, but worried I could get declined.

Bear in mind depending on the bank they may credit score you to reduce your overdraft. As effectively they are taking the old one totally away and giving you a new one.

CLAPTON

armyoftwo wrote: »

Hey YorkshireBoy,

The balances on one card is £3000 with 0% until Nov this Year and £2600 on the other at 15.9%.

with debts of 5,600 it seems odd to be worrying about reducing your OD facility
in any event they may decide not to give you any OD when they re score you.

armyoftwo

Hi stclair, just out interest, which banks credit score you for reducing your o/d limit? Or is that standard practice for all banks?

CLAPTON, I understand your post, however I am clearing my debts (be it slowly) but I am glad to say that I cleared my o/d debt. I was thinking of closing it just so I don't get into the mess I did before. I am hoping to clear the £2600 debt in the next couple of months as I am owed some money (over £1k) from a friend.

Doctor_Duke

armyoftwo wrote: »

Hi stclair, just out interest, which banks credit score you for reducing your o/d limit? Or is that standard practice for all banks?

Banks have their own credit scoring criteria depends on the bank but NatWest have done a hard credit check when I asked to reduce my overdraft from £1k to £500!