Free Overdraft - Credit Utilization

Mattw1995

Hi,

I have recently been doing some research into credit ratings and understand that credit utilization is one of the factors affecting credit rating score. I have read that having a utilization of around 30% is good, not too high, not too low.

My question is regarding my current account with a free arranged overdraft of £2000.
I have a credit card with a credit limit of £200 and the above current account. If I keep my credit card at a utilization of 30%, what should I do with the overdraft??

I currently have around £1000 cash in the current account, therefore my utilization is 0%. Should I transfer this into a savings account, and use around £600 of my overdraft each month, so that I also have a utilization ratio of 30% in this account?

Doing this will also mean that I lose my 3% interest.

Advice would be greatly appreciated!

PixelPound

The utilization is a MAXIMUM not a recommended. Don't use any of your overdraft unless you need, tbh 0% overdraft usage looks a lot better than any use of it. Are you keeping the card at 30% when you could pay it off, is this incurring interest charges, if so stop. If you are spending 30% of your card and clearing the balance each month, that isn't so bad.

DCFC79

Mattw1995 wrote: »

Hi,

I have recently been doing some research into credit ratings and understand that credit utilization is one of the factors affecting credit rating score. I have read that having a utilization of around 30% is good, not too high, not too low.

My question is regarding my current account with a free arranged overdraft of £2000.
I have a credit card with a credit limit of £200 and the above current account. If I keep my credit card at a utilization of 30%, what should I do with the overdraft??

I currently have around £1000 cash in the current account, therefore my utilization is 0%. Should I transfer this into a savings account, and use around £600 of my overdraft each month, so that I also have a utilization ratio of 30% in this account?

Doing this will also mean that I lose my 3% interest.

Advice would be greatly appreciated!

It may affect the credit score but no 1 else can see it.

Mattw1995

I am spending 30% of my card and clearing the balance... I am incurring no charges.

I understand what you're saying, but when checking my credit report, my total utilization is very low as I'm using none of my overdraft. My credit utilization shows up as between fair and good, I would like to get it into the very good ranking.

Shakin_Steve

If you're into 0% interest cards, then your utilisation is going to be high anyway. I have a Tesco CC, £2400 limit. I've used £1500 of it and only intend to make the minimum payment until March 2019 when the 0% runs out. Same with my barclaycard, that's till May 2019 with an even higher utilisation.

SHill

Why what's the rush to getting a good rating?

DCFC79

SHill wrote: »

Why what's the rush to getting a good rating?

Its the latest craze 😉