Overdraft killing my credit score?

Kiwi4444

Hello and thank you for taking your time to read this, I have a £5,000 overdraft limit with Halifax, I don't use it but if I lower my overdraft limit to say £500 would that increase my credit score or decrease my credit score? thank you once again.

[Deleted User]

Doesn't matter. You credit score doesn't have any meaning.

Lenders generally see you most positively if you have access to credit but don't particularly need to use it.

However, too much available credit can also be a concern for lenders.

Lower it if it makes you feel better or if your income is low to moderate. Otherwise, I would leave it.

Superscrooge

An unused £5,000 overdraft hasn't killed my meaningless credit score!

takman

I would get rid of it completely due to the simple fact that needing an overdraft is a sign of poor money management.

MEM62

takman wrote: »

I would get rid of it completely due to the simple fact that needing an overdraft is a sign of poor money management.

Not in the OP's case as he does not use it.

takman

MEM62 wrote: »

Not in the OP's case as he does not use it.

Even if you never use an overdraft just having one available shows your not completely confident in your finances. Someone who was in control of their finances would happily reduce their overdraft to zero as their is no need for them to have one.

Fireflyaway

Unless you are applying for a mortgage and they look at your available credit does it matter?

takman

Fireflyaway wrote: »

Unless you are applying for a mortgage and they look at your available credit does it matter?

For some people having a large overdraft available could be the difference between being accepted or not for a Credit Card which has benefits such as cashback, or 0% interest on purchases/balance transfers. It could also mean you get accepted but are offered a lower limit than if you didn't have an overdraft. So there is no point in having an overdraft "just in case" when it offers no benefits and could reduce your chances of getting beneficial credit products.

David555

Interesting stuff. I was thinking the other day about getting a overdraft to improve my credit rating when I logged in my online banking and saw a message glowing away saying apply for a overdraft. I got to the last page of applying choosing a £100 overdraft before I had second thoughts and thankfully backed out when they wanted to do a credit check.

I'd never of gone into it but you'd think it would of been a positive to lenders that (some) have overdrafts and never use them showing that we are able to manage our finances. Glad I backed out now

TheShape

I'll be keeping my 'just in case' overdrafts 'just in case' I need them. I've got a £1500 overdraft facility on my main account and a few ranging from £50 to £500 on other accounts.

No need for anyone to worry that having a small overdraft facility is going to stop them getting that credit card/car finance/mortgage.

Thrugelmir

Why do you need the facility?

If you don't use it then you may lose it in time anyway. General rule is to close unwanted accounts as makes for good housekeeping. As reduces the possibility of impacting on future credit applications.