Does an overdraft charge affect your credit score?

Last post Thu, May 10 2007, 9:37 PM by nedsram. 2 replies.
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  •  Thu, May 10 2007, 9:37 PM

    Re: Does an overdraft charge affect your credit score?

    It would appear that you are not completely in control of your finances. With a linked savings account - given sufficient funds - there is no reason for your current account to become overdrawn. The answer is to get Microsoft Money. You can set up all of your regular income and payments, and download transactions directly from the bank. Once you have an accurate, up to date, idea of how much money is in your current account, and what payments are due, you can make sure that funds are transferred to the current account in time to avoid the account becoming overdrawn. (You should allow at least two working days.)

    Yes you can set up a standing order, but this is an inflexible solution. A better one is to use their online banking service to transfer money as and when it is required.

    Sadly Quicken is no longer available in this country, but I originally decided to get Quicken when I unexpectedly went into the red by several hundred pounds. I clearly wasn't in control of my finances either! In those days I had to pay a visit to the building society, get them to write a cheque, then go to the bank and deposit it. These days it can all be done electronically from home.

    As coolt said, an overdraft doesn't affect your credit rating. What does affect it is late payment - or worse, non-payment - of bills.

    • Post Points: 5
  •  Thu, Apr 12 2007, 7:59 PM

    Re: Does an overdraft charge affect your credit score?


    No it doesn't affect your credit rating and set up a standing order from your savings account into your current account to cover your rent. If it's happened on a few occasions then they may refuse to recredit the charge but a mention of the current ongoing investigation by the OFT usualy does the trick

    • Post Points: 20
  •  Wed, Apr 11 2007, 7:18 PM

    Does an overdraft charge affect your credit score?


    I have just received a letter from HSBC informing me that an overdraft charge will be soon debited to my account. I have with them 2 accounts, a normal one and a saving one. A standing order for my rent is set up on the normal account. Most of my money are obviously in the saving account. I have gone overdraft few times in coincidence of the payment of my rent, but the saving account has always had more than enough and I have always transferred money from the saving account to the normal account when in overdraft. It's clearly more of a lack of care rather than absence of money, I should have had the standing order on the saving account rather than the normal account (This one with HSBC is not my main account, my salary is credited to an account opened with another bank).

    Should I be worried for my credit score? Should I ask to cancel the charge? It's just 16£, I though I had a small overdraft, but I may be wrong, never really needed to use more money than the ones in my account.

    If anyone has got some idea please let me know.


    • Post Points: 20