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Does Arranged Overdraft build Credit History

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RahmanQRahmanQ Forumite
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MoneySaving Newbie
Asking for a friend
Can you build a credit history and credit score through Arranged Overdraft even if you don’t use your arranged overdraft money as they don’t want to get a high interest credit card.

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  • edited 23 February at 10:21AM
    2021BJ2021BJ Forumite
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    edited 23 February at 10:21AM
    An unused arranged overdraft will probably have a fairly negligible positive effect on how a lender will view you.

    A used arranged overdraft will definitely have a negative effect on how a lender views you.

    Why don't they want to get a high interest rate credit card?  They are aware that if you pay it off in full there is no interest to pay right?  And an overdraft won't have that grace period if it's used and the OD interest rates rival those of most high interest credit cards?
  • FarfetchFarfetch Forumite
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    No-one has a credit score, don't focus on that, it's just a gimmick used to sell you services, lenders never see it
    Compare the interest rates / charges - going into an OD and not paying it off vs spending on a CC and not paying it off
    If you spend on a CC and pay off in full you don't pay interest
  • ReecesWaffleReecesWaffle Forumite
    40 posts
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    MoneySaving Newbie
    I’ve read that overdrafts don’t help your credit score. Don’t know how true that is however.
  • zx81zx81 Forumite
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    It depends on how your chosen lender views it. An available but unused OD generally won't do any harm.
  • DandytfDandytf Forumite
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    I've found exceeding overdraft is very negatively viewed via cra reports.
    sc dmp 2012 13k Dec' 2021 12375 paid 91% approx. Next update whenever.
    Mid 2018 Help2save 50 uk pounds per month-New Rules 2020
    Mid 2019/20-Virgin Money e-saver 14.
    H.L. Active -Charter Savings .65% 50 u.k. pounds.
  • zx81zx81 Forumite
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    There's a shocker!
  • ThrugelmirThrugelmir Forumite
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    RahmanQ said:
    Asking for a friend
    Can you build a credit history and credit score through Arranged Overdraft even if you don’t use your arranged overdraft money as they don’t want to get a high interest credit card.
    If you don't borrow money. Then no one is any the wiser. 
    “Far from seamlessly assimilating new ideas into our existing belief framework, research shows that we actually tend to get more firm in our cherished beliefs when those beliefs become challenged.”
    ― Daniel Crosby
  • cymruchriscymruchris Forumite
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    Overdrafts are recorded on your credit file - as is their use - I would think it adds a small additional layer of positive credit history, as the bank are happy to trust you with the ability to go overdrawn, and then if you don't use the facility, that shows you're not immensely desperate for cash.
    An ex-bankrupt on a journey of recovery. Feel free to send me a DM reference credit building credit cards from the usual suspects :) Happy to help others going through what I've been through!
  • DandytfDandytf Forumite
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    zx81 said:
    There's a shocker!
    🥵
    Honestly!
    sc dmp 2012 13k Dec' 2021 12375 paid 91% approx. Next update whenever.
    Mid 2018 Help2save 50 uk pounds per month-New Rules 2020
    Mid 2019/20-Virgin Money e-saver 14.
    H.L. Active -Charter Savings .65% 50 u.k. pounds.
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