Overdraft Vs Mortgage Deposit

EvanF

My wife and I are currently looking at buying our first property.

I have been using my personal current account's arranged overdraft facility regularly for a number of years, and I was wondering, would paying off a couple hundred pounds of my overdraft, and bringing the total overdraft limit down boost my credit score and therefore look better on a mortgage application, or at this stage, would the money be better spent just putting extra on to our small deposit/putting in my help to buy ISA?

Any help or advice any one can provide at this stage would be incredibly useful.

Hope to hear from you with any guidance at all soon.

Many thanks in advance

MaryNB

It would be best to stop using the overdraft altogether and use a credit card when you need credit. An overdraft isn't seen as sensible form of regular credit usage.

By the way, you credit score isn't important. Lenders won't see it. They will only see the information on your credit file and will do their own internal scoring (you don't get to see that score).

ETA: with regards to using money for your deposit vs paying it off. Could be a case of six of one half a dozen of the other. Your net savings will be the same. A high deposit will get you better rates but more debt will affect your affordability. It might come down to how much either option costs/earns you over all - the fees you pay on your overdraft vs the interest you get on your savings.

EvanF

Thanks very much for the advice.

I might put a bit more in to the deposit and keep the rest in my account, and just not reduce my overdraft, then I'm not using all the amount of total borrowing, which will also improve the credit score.

But thank you very much for your help indeed.