Can banks report overdrafts to credit reference agencies or no?

jonjon123

Lets say someone else had an overdraft of that size.....
If say u wanted to pay back £100 a month which is a reasonable amount (im sure most will agree) by the time you pay it off you would have paid approximately £8000 in fees/interest which is disgusting.

jonjon123

Fighter1986 said:

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. 

From my understanding they are fixed fees but fluctuate depending on how overdrawn you are.
So lets say it was -£1000 that would be about £50 a month, then -2000 £100 and so on.
I would make cutbacks, but unfortunately due to reduced income due to Covid, I dont have any disposable income to reduce it and that's where my comment came in (above) about banks not helping.
How does 30 days freeze solve the problem and that's what infuriates me......here to help......no you're not you're here to help yourself 

jonjon123

On the subject of credit worthiness....
Does anyone know why my credit file is showing as ''good'' because I am up to date with all my credit card/loan repayments but when it comes to credit cards it shows as ''very weak'' BUT i have limits on all 3 credit cards, but my balances are all 0 so why is that ''very weak''? 
Or is it because of my limit levels i have even though im not using them?

Fighter1986

jonjon123 said:

Fighter1986 said:

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. 

From my understanding they are fixed fees but fluctuate depending on how overdrawn you are.
So lets say it was -£1000 that would be about £50 a month, then -2000 £100 and so on.
I would make cutbacks, but unfortunately due to reduced income due to Covid, I dont have any disposable income to reduce it and that's where my comment came in (above) about banks not helping.
How does 30 days freeze solve the problem and that's what infuriates me......here to help......no you're not you're here to help yourself 

That's not a fixed fee, that's standard interest. A fixed fee doesn't vary depending on your overdrawn balance, interest does.

jonjon123 said:

On the subject of credit worthiness....
Does anyone know why my credit file is showing as ''good'' because I am up to date with all my credit card/loan repayments but when it comes to credit cards it shows as ''very weak'' BUT i have limits on all 3 credit cards, but my balances are all 0 so why is that ''very weak''? 
Or is it because of my limit levels i have even though im not using them?

Your affordability is weak because you're heavily overdrawn i.e. you have less than no spare money.

Please note that lenders don't see this score themselves. This is only for your amusement. Lenders see the raw data in your credit file; your account history etc, but they decide their own score based on their own assessment criteria, and each lender has their own criteria. There's no such thing as one score fits all. Different lenders have a different risk apetite.

The solution to your problem is to do your best to re-organise your life in such a way that you are living within your means.

This might mean cancellation of services you pay for monthly but don't absolutely need, revising how much you spend on R&R / Entertainment, restructuring how you do your groceries in a more cost effective manner, selling off assets you either no longer need or could get by with a cheaper version of (car, perhaps), and in an extreme case see perhaps about living somewhere cheaper.

Along side this the other side of the coin is income - a tough cookie right now given the pandemic but do keep your eyes open and ears to the ground about better earning opportunities you might be able to take advantage of to increase your income.

Your overdraft situation is a result of a lifestyle that exceeds your means and needs revising. This isn't something the bank can fix.

You'll get there, it's gonna take some tough decisions and hard work but you're absolutely capable of it. 

[Deleted User]

It's because the algorithms are flaky and not to be taken notice of.

If you're not using any of your cardsccards at least one for your regular spend and clear it in full each month.

jonjon123

Fighter1986 said:

jonjon123 said:

Fighter1986 said:

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. 

From my understanding they are fixed fees but fluctuate depending on how overdrawn you are.
So lets say it was -£1000 that would be about £50 a month, then -2000 £100 and so on.
I would make cutbacks, but unfortunately due to reduced income due to Covid, I dont have any disposable income to reduce it and that's where my comment came in (above) about banks not helping.
How does 30 days freeze solve the problem and that's what infuriates me......here to help......no you're not you're here to help yourself 

That's not a fixed fee, that's standard interest. A fixed fee doesn't vary depending on your overdrawn balance, interest does.

jonjon123 said:

On the subject of credit worthiness....
Does anyone know why my credit file is showing as ''good'' because I am up to date with all my credit card/loan repayments but when it comes to credit cards it shows as ''very weak'' BUT i have limits on all 3 credit cards, but my balances are all 0 so why is that ''very weak''? 
Or is it because of my limit levels i have even though im not using them?

Your affordability is weak because you're heavily overdrawn i.e. you have less than no spare money.

Please note that lenders don't see this score themselves. This is only for your amusement. Lenders see the raw data in your credit file; your account history etc, but they decide their own score based on their own assessment criteria, and each lender has their own criteria. There's no such thing as one score fits all. Different lenders have a different risk apetite.

The solution to your problem is to do your best to re-organise your life in such a way that you are living within your means.

This might mean cancellation of services you pay for monthly but don't absolutely need, revising how much you spend on R&R / Entertainment, restructuring how you do your groceries in a more cost effective manner, selling off assets you either no longer need or could get by with a cheaper version of (car, perhaps), and in an extreme case see perhaps about living somewhere cheaper.

Along side this the other side of the coin is income - a tough cookie right now given the pandemic but do keep your eyes open and ears to the ground about better earning opportunities you might be able to take advantage of to increase your income.

Your overdraft situation is a result of a lifestyle that exceeds your means and needs revising. This isn't something the bank can fix.

You'll get there, it's gonna take some tough decisions and hard work but you're absolutely capable of it. 

Appreciate the comments, thanks