Can banks report overdrafts to credit reference agencies or no?

jonjon123

Hi everyone, I hope you are well and staying safe.
As most of us are aware this Covid outbreak has given alot of people (including me) massive financial struggles at the moment and things have got so bad that I fear I am going to have to dip into my overdraft to survive as I am currently laid off and not being paid.
The reason I wanted to ask the question was because my credit file is very good atm, the last thing I really wanted to do is hurt it for the future, but cannot afford the excessive fees that my bank charges for using it, but it's my only option I have left.
The big question I wanted to ask was......Can banks report you to credit reference agencies for not paying your overdraft back for the time being in the same way that banks will report defaults for not making loan/credit card payments on time, or is this different?
I did read on Experian that they can't, as obviously I need some sort of help for the time being, but the last thing I want to do is hit my credit file with a nasty mark at the same time, so any replies/help will be greatly appreciated.
Many thanks.
Jon.

Thrugelmir

An overdraft is a debt and will reported as such. Providing the account terms and conditions allow the bank to do so. 

A credit file would be of no value to other users if the information was incomplete. 

[Deleted User]

They will report your OD balance.  While it's better not to use it, it's not the end of the world on a short term basis as long as you don't exceed the limit.

jonjon123

Many thanks for the replies so far.
So let me get this straight, providing I stay within my limit it wont have an impact on my CF correct?
So what about asking the bank to place a restriction on my fees/charges as they are very excessive?
Does that impact the file if I ask them to do that please?

[Deleted User]

It will have an impact to the extent that the OD usage is reported.

Are the fees excessive, or are they in line with your agreement? They're unlikely to reduce them if they're contractual - if they do, beware of any arrangement being marked on your files.

tripled

jonjon123 said:

Many thanks for the replies so far.
So let me get this straight, providing I stay within my limit it wont have an impact on my CF correct?
So what about asking the bank to place a restriction on my fees/charges as they are very excessive?
Does that impact the file if I ask them to do that please?

It will likely be recorded on your credit file and that information would be available to lenders when applying for credit. Dipping into it for a short period is unlikely to have a significant long term impact.

If your bank is nice enough to agree to discount their charges that will not impact your credit file.

jonjon123

Deleted_User said:

It will have an impact to the extent that the OD usage is reported.

Are the fees excessive, or are they in line with your agreement? They're unlikely to reduce them if they're contractual - if they do, beware of any arrangement being marked on your files.

I SEE. So if i ask them to be frozen/interest stopped temporarily that could be reported onto my file, yes?
Yes the fees are excessive, it's approximately £200 a month in fees alone to be 4000 overdrawn which is ridiculous, so if you saved £200 at a future date to start paying your debt back, it won't actually go anywhere because you are just paying solely the charges and nothing else.
In a way banks really irritate me saying they are there to help......they aren't at all helping because if you take 1 step forward they push you 2 steps back and it's sheer greed and they aren't helping anybody but themselves.

jonjon123

tripled said:

jonjon123 said:

Many thanks for the replies so far.
So let me get this straight, providing I stay within my limit it wont have an impact on my CF correct?
So what about asking the bank to place a restriction on my fees/charges as they are very excessive?
Does that impact the file if I ask them to do that please?

It will likely be recorded on your credit file and that information would be available to lenders when applying for credit. Dipping into it for a short period is unlikely to have a significant long term impact.

If your bank is nice enough to agree to discount their charges that will not impact your credit file.

Nice enough? LOL
I've just spoken to them now and explained my financial situation and they can only freeze it for up to 30 days which is a load of help.
What makes me laugh is when covid hit in March most/all banks chose to freeze all their interest/overdraft/mortgages and loans charges for 3 months and now it's only 30 days.
I fail to see how banks are helping customers and promote this over TV when they aren't really helping anyone.

Ebe_Scrooge

jonjon123 said:

Deleted_User said:

It will have an impact to the extent that the OD usage is reported.

Are the fees excessive, or are they in line with your agreement? They're unlikely to reduce them if they're contractual - if they do, beware of any arrangement being marked on your files.

Yes the fees are excessive, it's approximately £200 a month in fees alone to be 4000 overdrawn which is ridiculous,

A £4000 overdraft ???  Ouch !  That's a heck of a big overdraft.

You need to be aware that a bank can, at any time, ask for an overdraft to be repaid immediately.  You're on somewhat precarious ground if you're carrying that much of an overdraft.

jonjon123

Ebe_Scrooge said:

jonjon123 said:

Deleted_User said:

It will have an impact to the extent that the OD usage is reported.

Are the fees excessive, or are they in line with your agreement? They're unlikely to reduce them if they're contractual - if they do, beware of any arrangement being marked on your files.

Yes the fees are excessive, it's approximately £200 a month in fees alone to be 4000 overdrawn which is ridiculous,

A £4000 overdraft ???  Ouch !  That's a heck of a big overdraft.

You need to be aware that a bank can, at any time, ask for an overdraft to be repaid immediately.  You're on somewhat precarious ground if you're carrying that much of an overdraft.

Yeah tell me about it.
This is what i was saying above, the fees for this are around £200 a month which in my eyes for a bank is taking the p*ss.
Why would a bank firstly give you one that high on a 26k salary (when im back eventually) and secondly how do they expect you to pay it back with charges like this?
In some ways they are worse than a credit card, just a trap because you need £250-£300 a month just to start to SLOWLY bring it down and even then that's not alot.
And people wander how directors/execs get million pound bonuses, which i wouldnt be surprised are still being given out during the pandemic

Fighter1986

The fact you've been using a large overdraft will be reported to your credit file.

Are the fees incurred, standard interest, or are they punitive charges i.e. fixed fees?

If it's just standard interest and you arne't over any limit and bouncing payments, then adverse information won't be recorded on your credit file, but being heavily overdrawn alone will have a deleterious effect on your credit worthiness. 

Try to make cutbacks and improvements in income to reduce this overdraft usage over time.

As you reduce your overdrawn balance be sure to reduce your limit too, to remove the temptation to use it again.