Should i open an overdraft?

Scott1875

Hi folks.
Loving the tips and advice on this forum. It's been a real game changer in helping me improve/build my credit history after default (paid) back in 2016.

I recently posted on the credit card section that I'd been accepted for Barclaycard with a 5k credit limit (thanks to mse eligibility checker). This was on the advice that potential lenders may view that more favourably than only having one credit card (Capital One with 2500k limit). I don't carry a rolling balance and pay off every month.

I read that having different types of credit is good and seen as a positive and that a bank overdraft shows the bank trust you with credit. My question is should i apply for an overdraft or should i just leave things as they are? I guess a new credit card and overdraft in a short space of time wouldn't be seen as good?

I also have car finance over a 3 year term (2 years left) so should two credit cards managed well with car finance paid on time evey month be sufficient to improve my record?

Looks like my case is proof that the impact of a default does reduce over time as there is no way I'd have got car finance/credit cards a couple of years ago. There is light at the end of the tunnel folks!

My efforts are all geard towards getting a mortgage in the future, hopefully with the help of a broker.

Thanks again guys.

Willing2Learn

Should you open an overdraft?

Yes, but only so long as you NEVER use it. This is because dipping in to an overdraft can look to lenders as though you are living beyond your means...

Scott1875

Definitely wouldn't be planning to use it only to help credit record

[Deleted User]

I wouldn't bother if you have 2 credit cards already and the car finance.

Ben8282

Willing2Learn wrote: »

Should you open an overdraft?

Yes, but only so long as you NEVER use it. This is because dipping in to an overdraft can look to lenders as though you are living beyond your means...

Agree with this.
An overdraft facility is a good thing to have but a bad thing to ever use. Get an overdraft facility on your main current account but do your very best to avoid ever using it.


Are you sure that you are not falling into some sort of get more credit to improve a meaningless credit score and end up in debt trap?

You have managed to get a credit card with a reasonable credit limit but you are considering getting another one because having only one credit card 'doesn't look good'. Doesn't look good to WHO? The company that you apply to for credit card number 3?
I agree that having more than one credit card is normal but obtaining these cards in order for it to look good is not a valid reason.

You are trying to improve your credit history and credit record but for what ultimate purpose?

Scott1875

The reason for it is at the bottom of the OP

[Deleted User]

Scott1875 wrote: »

The reason for it is at the bottom of the OP

An overdraft will have little to no effect on a mortgage application

Scott1875

Ok thanks. I'll probably just leave the overdraft then

boo_star

Scott1875 wrote: »

Ok thanks. I'll probably just leave the overdraft then

To clarify, an overdraft won't be reported unless you use it, which doesn't look good.

Don't get one unless you need the credit.