To have an overdraft or not?

donlste

Hi All,

I was wondering if someone could offer me some advice please.

I'm in the process of paying my debts off and sorting my credit file out.

My question is this; I have an overdraft of £250, however from a credit report point of view, would it look better to cancel this, or to keep it and not use it?

I was wondering if by keeping it, but not using it would reflect better on my credit report? Thinking this would show good money management.

Many thanks

Grzegorz_Kowalski

I think the best is to have it, but not to use it. There is something magical with "utilisation": For lenders, you look much better with 5k debt and 50k limits, than with maxed CC with 300 limit.

binaryuniverse

Showing you don't need to use an available overdraft is a sign you are good with your money. Keep it.

Dobbibill

While paying down your debt, keep it but don't use it for the utilisation.

Once DF you can get rid of it if you want but at such a small amount it probably won't make a difference either way.

Dandytf

To add 250 o/d limit is quite sensible.
It's nice safety net even to avoid unexpected charges.
I agree with others, rather than cancel-try avoid using it as much as possible and don't worry if you do use it sometimes for financial emergencies.
E.g. I wasn't using my 250 overdraft recently until I had to pay 275 for car bodywork repair last week.
Though cause I budget as much as possible, I'll clear overdraft over next few weeks.

donlste

Many thanks for the advice! I’ll keep it there!