Effect of overdraft on credit file??
moatmeister
Posts: 322 Forumite
How much and what effect does having an overdraft have on your credit file? Is there any preference in paying an overdraft off or paying a credit card balance down in terms of the effect on your credit file?
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Comments
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In what sense are you asking?
If you mean the made up score/rating then no effect.
Using an overdraft can make you look desperate for cash to some lenders0 -
As I asked really. In order to improve your credit file with a view to encouraging further borrowing in the future, is it best to pay off an overdraft or pay down a credit card?0
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It depends.
How much is owing on each and what are the interest rates?0 -
I echo what YB has said - an overdraft is normally used to gap fill the month - clearing and not using an overdraft demonstrates you can budget month to month.I’m a Forum Ambassador and I support the Forum Team on the Budgeting & Bank Accounts, Credit Cards, Credit File & Ratings and Energy boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
If you can't be the best -
Just be better than you were yesterday.0
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