Will overdraft help?

viking30

Will having an overdraft help my credit score?
Basically i have a low score from having spent so much time overseas and in the last two years never having any credit at all. I have a high interest current account with the possibility of a automatic 5000 overdraft but have never invoked it. Basically all i have to do is click apply using internet backing to have a guaranteed 5000. I have always just left the overdraft set at zero. Would it help my credit score if i accept the overdraft but never use it?
Hope that makes sense?

Cheers.

jonesMUFCforever

It can work both ways.
At the moment your credit 'exposure' is nil so say that you apply for a credit card you may get a decent limit.
If you have a £5k limit on your Barclays account other lenders can see that you already have a credit line of £5k and may offer you less on a credit card.

Then again it might make no difference at all as all lenders will have their own criteria when deciding to lend to you or not.

I would certainly apply for a smallish limit just in case of emergencies - going o/d with an authorised overdraft will cost you pennies in interest - but going into unauthorised will cost you many pounds in charges.

taless

I'm not sure if it applies to all overdrafts, but my approved overdrafts (which I also do not use) never appears on my Credit Report.

In Experian Credit Report, they only show "Overdraft Balance" and not "Authorized Overdraft Limit". Hence, for both of my current accounts, although they have authorized overdrafts (but unused), they shows up as £0.

Like Ejones999 said, I would apply for a small OD for unexpected outgoings. Also, I think you may want to try to apply for a credit card with your current account holding bank - I guess they will grant you a credit card and that will certainly be the one that'll really help your credit rating!

viking30

taless wrote: »

Also, I think you may want to try to apply for a credit card with your current account holding bank - I guess they will grant you a credit card and that will certainly be the one that'll really help your credit rating!

Thanks,
In the past two years have applied four times for a credit card (halifax) three times online and once in branch. Rejected on credit score every time. Strange they guaranteed me £5,000 overdraft and have offered me £13,000 personal loan. I even asked about the loan on the phone and was assured there would be no problem. I have over £8,000 in savings with them but cant get a credit card. In the branch they even called head office to plead my case but they just said try again in another six months. I told them i only wanted it to improve my credit score should i want to apply for a mortgage in the future. Their responce.....A mortgage? you want a mortgage? no problem. :rotfl:

After two years i gave up on Halifax and got myself a basic capital one card.