Financial Question - Loan + Overdraft

!Sargent_Mango!

!Sargent_Mango!

!Sargent_Mango!

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I recently had some big bills to pay. (multiple £1000's), and its left me taking several months to clear a £3500 overdraft.

Now, ive been looking at a new car for a while now, (2 yrs!), if I applied for a loan with my account being overdrawn, does this affect anything?

Can they tell if I am overdrawn at my bank?
 
Yep it'll show on a credit check, whether that'll affect their decision or not I don't know as I got a loan from natwest while in my overdraft but it was a loan tailored towards graduates so I imagine the criteria will be slightly different.
 
Your post suggest its taken several months to clear your overdraft. That reads to me that you no longer have it?
 
tom_e said:
Yep it'll show on a credit check, whether that'll affect their decision or not I don't know as I got a loan from natwest while in my overdraft but it was a loan tailored towards graduates so I imagine the criteria will be slightly different.
Click to expand...

Ok.

Is this TRUE??

I get what people are saying about applying for it now. Thats fine. I can wait until I'm 100% clear, but what concerns me, is that the months of being overdrawn would show on a Credit Check...

This is authorised obviously, I have a £3600 overdraft should I require it, and I required it just before Christmas.
 
There is no problem in using your overdraft, as long as it is authorised as you say it is.

Being in debt and paying it off is exactly what they want to see for a good credit score.
 
You'll be fine!!

I bought my flat and car while having a o/d. It's about your ability to repay they care about.
 
As long as you don't have any missed payments or defaults on the overdraft, I wouldn't have thought it would cause an issue. Other than getting yourself in to even more debt obviously. :p
 
Do you urgently need a new car? It sounds like you're living on a tight budget at the moment trying to clear your overdraft. If you can't save for a few months more, max out your overdraft and get the smallest loan you can manage. Or consider a cheaper car!
 
Ok, this is my area of expertise i think =) i work for a credit reference agency in the uk.

In answer to your question, a high balance on a card/loan will affect the lenders decision on whether you are accepted, if you are running high balances on overdraft/credit facilities it can make a lender think that you are credit dependent.

Best advice i can give overall is to check your report

Experian free 30 day trial

this will give you access to your full credit report for 30 days, free of charge (as long as you do not already and have not had an account before)

Please note, by signing up it will go on to a standard membership after the 30days is up for £14.99 per month, its non contractual so if you don't want it to, you can just call to cancel at any point during the trial.

Things that affect/may affect a lenders decision
- if you have applied for any form of credit in the last 12 months (advised no more than 2 applications in 6 months block)
- late or missed payments in the last 12 months
- Defaults/Bankruptcy defaults and bankruptcy information is on record for 6 years (even if you settle a default its still there for 6 years)
- Electoral role- a big one this, make sure you are registered at your current address, lenders like to know where you live.

Any more question, feel free to ask
 
All you have is an overdraft. They will not refuse you for that.

Regular income + ability to pay back overdraft = good creditor.

Trust me the banks are as greedy now as they ever were. I have daft debts (work related) and Lloyds just upped my credit card limit with out me asking :rolleyes:
 
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