Unarranged overdraft

Seanj123

So yesterday on an account that a hardly used which is charged £20 a month to use it had gone overdrawn by £7. I noticed this today and cleared the funds. What impact will this have on my credit score if any? The account is with NatWest 

MorningcoffeeIV

It may or may not trash your score, but that's not important.

The question is whether it will be reported to your files.  If it is, lenders will interpret it based on their own criteria.  On a well managed file, a one off blip isn't a major issue.  If you're not great with your finances, it'll be more of a problem.

kazwookie

Seanj123 said:

So yesterday on an account that a hardly used which is charged £20 a month to use it had gone overdrawn by £7. I noticed this today and cleared the funds. What impact will this have on my credit score if any? The account is with NatWest 

If the account is hardly used, and costs £20 per month, why are you keeping it open??

I would ring them up and tell them it was an oversight by you, and ask for the charge/ fees back.

prettyandfluffy

Unless there is some benefit to keeping the bank account, why don't you switch it to another bank when there's an offer running and get some money in return? I just did this with an account I hardly use and I'm £175 up.

Seanj123

I kept the account open for the insurance benefits it has and plan to use it once my mortgage goes threw for all my bills etc, would Is anytime now. I’m just worried this will show up on my credit file and maybe the lender may ask so questions over a simple £7 oversight. 

jimjames

Seanj123 said:

So yesterday on an account that a hardly used which is charged £20 a month to use it had gone overdrawn by £7. I noticed this today and cleared the funds. What impact will this have on my credit score if any? The account is with NatWest 

How long was it overdrawn for? My account goes overdrawn most days but gets cleared immediately from savings. I noticed from Santander that they charge for an agreed overdraft but not for a unauthorised one which seems odd.

Hopefully if it was quickly cleared then it won't be shown on credit file.

Nasqueron

NatWest app sends you an alert if you are overdrawn and you have until 3pm to sort it before they charge you or report it. I found this out today when Santander decided to take a DD 3 days before the due date! If you were a day late paying it, you'll likely get hit with a fee though what will be on your credit record you'll have to wait and see. Why not put more money in it or setup a SO to move cash in every month to avoid this?

mab3000

It won’t flag up on your credit report as a late or missed payment as you have cleared it within a day. If you left it in un arranged overdraft and NatWest gave you notice to pay it back, and you failed to do so, that is when it would start being reported as late/missed payments. 

Worse case scenario, if the day your account went into un arranged overdraft is the same day of the month as NatWest report your account to the credit reference agencies, then may show that the current debit balance on the account is £7 but you have a £0 credit limit, therefore highlighting you are in an unarranged overdraft. As long as the account isn’t overdrawn by the time your file is updated next month, then it will just go back to showing a £0 balance on your credit file. 

You would certainly be unlucky if it is the same date. But if it is, it’s really no big deal. 

HawkE

jimjames said:

Seanj123 said:

So yesterday on an account that a hardly used which is charged £20 a month to use it had gone overdrawn by £7. I noticed this today and cleared the funds. What impact will this have on my credit score if any? The account is with NatWest 

How long was it overdrawn for? My account goes overdrawn most days but gets cleared immediately from savings. I noticed from Santander that they charge for an agreed overdraft but not for a unauthorised one which seems odd.

I went overdrawn for the first time on a Santander account but transferred money straight away into the account (it was about 7am).   I thought I might get charged as my overdraft was an agreed overdraft, but clearing it the same day seems to have avoided any charges.   Not sure what the cut-off time to clear the overdrawn balance would be as I cleared the overdraft very early in the morning.