Using house deposit to clear debt

[Deleted User]

Pay off the overdraft. 1) It's costing you more than your savings are earning. 2) It can with withdrawn at anytime. 3) Living in your overdraft does not look good to lenders especially if it's unauthorised.

Using an unauthorised overdraft regularly suggests budgeting issues which you should address before buying a property. Maybe head over to the Bank Accounts and Budgeting board.

Don't focus on your credit score, it's just a marketing tool, it's your credit history that counts.

https://www.moneysavingexpert.com/loans/credit-rating-credit-score/

Sea_Shell

Have you identified the root cause of your debt? Is it increasing month on month, or was it for a one off purchase (car?).

Pay it off, definitely, but you also need to take measures so it doesn't creep up again.

lees80

Pay it off. An unauthorised overdraft is doing you no favours at all.

If you're a first time buyer then open an ISA and throw the money in it.

Muddypaws25

Thank you for all the replies.

It is an old debt that has creeped back up, I totally accept it is my fault for leaving it so long and now the interest on it has gone up so much, from the original unauthorised amount.

No I'm not a first time buyer, I bought a house over 10 years ago, and the mortgage was paid off in full when I sold.

Thanks

AdrianC

Your salary is low. Your credit score is bad and getting worse.
You've only got £4k in actual net assets.

Let's face it, and I'm sorry to be blunt here, but you aren't going to be buying a house any time soon.

Shove everything in one pot, and try to increase your savings by living within your means.

graphs

You haven't got a 5.5k house deposit, you have a 5.5k minus your debt deposit.