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Does your bank overdraft get taken into account on a credit card application?

Last post Thu, Feb 12 2009, 2:08 PM by Eco_warrior. 3 replies.
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  •  Thu, Feb 12 2009, 2:08 PM

    Re: Does your bank overdraft get taken into account on a credit card application?

    I was under the impression that overdrafts would show on a credit seach?

    As to how they affect credit card applications? I would imagine it would vary between banks but id be surprised if it wasnt taken into consideration, much in the same way a £0 balance credit card with a £5k limit does. ie the more available credit the greater the risk, resulting with an offer of a lower limit. Credit card companies may total all your unsecured debt when calculating what they will offer you, therefore the overdraft would be included. This was certainly the case in my past experience.

    Eco

    • Post Points: 5
  •  Sat, Feb 07 2009, 9:55 PM

    Re: Does your bank overdraft get taken into account on a credit card application?

    maxsteam:

    I cannot see where your £1500 saved for emergencies comes from. Overdrafts are repayable on demand and it is quite possible that you could get a letter in the next year saying that the overdraft limit is being reduced.

    Ive had the overdraft for about 8 years, every year or so they extend it and send a letter to advise me of this. Ive never once gone over my limit or anything, and anyway I certainly dont plan on going right to the £4500 limit and am trying to get it down anyway.

    I was just wondering if a bigger overdraft limit has any effect on getting a credit card, whether the credit card companies look at your total limit, or just how how far into your overdraft you are.

    eg - If I'm £2500 overdrawn on a £4500 account, will that be looked at any differently than £2500 overdrawn on a £3000 account?

    • Post Points: 20
  •  Sat, Feb 07 2009, 9:30 PM

    Re: Does your bank overdraft get taken into account on a credit card application?

    Certainly any unauthorised overdraft should get into a credit file but not sensible use of one.

    I cannot see where your £1500 saved for emergencies comes from. Overdrafts are repayable on demand and it is quite possible that you could get a letter in the next year saying that the overdraft limit is being reduced. Overdrafts are only suitable for short term borrowing. Once you've paid off your overdraft and credit card, you might find something to put away for emergencies but you should not rely on your overdraft limit staying at £4500.

    • Post Points: 20
  •  Sat, Feb 07 2009, 4:07 PM

    Does your bank overdraft get taken into account on a credit card application?

    Hi all,

    I was just wondering if your bank overdraft gets seen by credit card companies when applying for credit (with a credit card company, not the bank), and if it makes any difference?

    The bank have recently increased my overdraft from £3000 to £4500, but I have not used any of the extra £1500 and intend to just leave it there and save it for emergencies, but I want to get a credit card to use for purchases.

    If overdrafts do get taken into account, are they looking at what your overdraft limit is, or just much you are overdrawn (regardless of your limit)? And does having a bigger overdraft mean you are likely to get more credit or less when applying for a card?

    I looked on experian and my bank shows up on there but nothing about what my overdraft was, it just showed my balance (which for some reason didnt relate in any way to what my balance was but I guess thats another issue!!).

    Thanks in advance.

    • Post Points: 20