Should I reduce my overdraft?

takman

Katiem900 wrote: »

Overdraft facility was for family, loans were for family. My deposit is tied up in stock investments if you're that interested. It's never ideal getting loans for family but at the end of the day, it helped them and got them out of a rut - and If you can't help your family in times of need, when can you?

The question I asked was simple, do I keep the £500 and not use it or lower it - there's no need to go keyboard warrior.

I did answer your question and said you should remove the overdraft completely.

Lenders don't know how much money you have invested and all they can see on your credit report is someone who is stuck in a small overdraft and is struggling to pay it off. This may be seen as a sign that you are financially struggling which can reduce your chances of getting a mortgage or getting a good rate.

Asking for clarification of your financial situation on a money saving forum is far from being a keyboard warrior.

You should also take some time to read about credit scores on this forum because i noticed you mentioned them increasing in your opening post, when in reality they are not very useful at all.

You need to be checking your credit file at the three main credit reference agencies and making sure all the information is correct before you even think about applying for a mortgage.

Katiem900

Understood, thank you. I just wasn't sure if it was better to have the overdraft (albeit not used) or to just reduce the limit and get rid completely. There seems to be a mix of responses. On my Experian report one of the positives given, is that I have a high amount of credit available on my AMEX, but the utilization is low. Some posters suggest it's better to have more unused credit, than to have less credit overall.

I've checked my report with both Equifax and Experian, all up to date and correct - never defaulted on any lines of credit i've had.

jessex1990

Keep the largest fee free overdraft but don't use it. This is your available credit percentage. For some reason lenders like people being offered large amounts of credit but not using it.

There's no point paying an ongoing monthly fee for more if you aren't using it so check with your bank if yours is fee free or not