To have an overdraft or not?

donlste · 12 May 2018 at 12:37AM

Hi All,

I was wondering if someone could offer me some advice please.

I'm in the process of paying my debts off and sorting my credit file out.

My question is this; I have an overdraft of £250, however from a credit report point of view, would it look better to cancel this, or to keep it and not use it?

I was wondering if by keeping it, but not using it would reflect better on my credit report? Thinking this would show good money management.

Many thanks

Grzegorz_Kowalski · 12 May 2018 at 2:33AM

I think the best is to have it, but not to use it. There is something magical with "utilisation": For lenders, you look much better with 5k debt and 50k limits, than with maxed CC with 300 limit.

binaryuniverse · 12 May 2018 at 7:51AM

Showing you don't need to use an available overdraft is a sign you are good with your money. Keep it.

Dobbibill · 12 May 2018 at 8:15AM

While paying down your debt, keep it but don't use it for the utilisation.

Once DF you can get rid of it if you want but at such a small amount it probably won't make a difference either way.

Dandytf · 14 May 2018 at 8:50AM

To add 250 o/d limit is quite sensible.
It's nice safety net even to avoid unexpected charges.
I agree with others, rather than cancel-try avoid using it as much as possible and don't worry if you do use it sometimes for financial emergencies.
E.g. I wasn't using my 250 overdraft recently until I had to pay 275 for car bodywork repair last week.
Though cause I budget as much as possible, I'll clear overdraft over next few weeks.

donlste · 16 May 2018 at 8:40PM

Many thanks for the advice! I’ll keep it there!

To have an overdraft or not?

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