Upgrade basic bank acct - any benefit?

Cash-Strapped.T32

Hi all, just a quickie question -

I have just a basic bank account (Natwest) - which to be honest I'm perfectly happy with as my everyday wages-in/bills-out account.

I also have an MBNA CC with a modest limit, with which I do the usual routine of only using for regular spends (in my case it's only for petrol/food shopping), and I pay off in full each month.

Other than my sim-only mobile, those are my only accounts reported to the CRAs (other than old, closed accounts)

My question is, for the purposes of mortgage applications (I'm thinking about 3-4 years in the future), would it be of any benefit now to look to "upgrade" my basic bank acct to one with an overdraft?

I've had my basic acct since 2013, so that demonstrates longevity, but obviously it doesn't demonstrate any credit-worthiness.
My other two accounts are relatively recent, so they don't demonstrate longevity.


Incidentally I do have several savings & investment accounts with other institutions but I know they have no bearing on the CRAs, so no need to go into them here - I am signed up on all 3 CRAs.

Thanks for any input all!

[Deleted User]

Can't help you with the matter of your upcoming mortgage, but I'm curious.

Do you, like me, keep getting told they're upgrading you to a "better" account, even though you haven't asked to be upgraded?

Nasqueron

Having an overdraft and not using it doesn't do anything and using it looks like you're struggling. If you have the card and mobile contract just keep doing it and avoid debt and you'll look good to lenders.

Cash-Strapped.T32

Bedsit_Bob wrote: »

Can't help you with the matter of your upcoming mortgage, but I'm curious.

Do you, like me, keep getting told they're upgrading you to a "better" account, even though you haven't asked to be upgraded?

Nope - they haven't tried to push me into any other products in ages, not since I first opened the account way back - this line of thought is because I know that it'll be a few year before I want to make any mortgate applications, but I can also imagine that current low interest rates we have now & have had for a long time are not going to stay this way for ever - that being the case, any little thing I can do now that might benefit me in a few years would be worth it - hopefully!

Nasqueron wrote: »

Having an overdraft and not using it doesn't do anything and using it looks like you're struggling. If you have the card and mobile contract just keep doing it and avoid debt and you'll look good to lenders.

Really? If you had put me on the spot, I would have guessed the opposite (providing the OD facility doesn't push you into having too much available credit as a ratio of your income); That having an OD facility but not having to use it, I would have thought is an outward sign of financial stability - no? Honest question.


(of course I appreciate the situation might differ for other types of credit)


I mean, you do describe my situation correctly - I always budget such that I don't have the "need" for an OD, I leave a bit of slack in my budget month to month for little things, and have an emergency pot just in case - so this question of getting an OD is purely for the purpose of how it looks to CRAs and lenders - and thinking ahead such that when it is the time to apply for mortgages, anything I've put in place has been in place for a few years...

Nasqueron

Having an overdraft indicates you may be living close to your means as you can't rely on having enough cash to last you until payday. There are legitimate reasons for having one and some may use them fine (particularly if there is no fee) but a bank with a basic buffer rather than OD works just as well if things are tight but not terrible.


Remember you are looking to show you are a responsible borrower which means paying bills on time and not struggling for money - cards and mobile bills, even store accounts, paid in full every month show that and will make you look good to lenders