Does Reducing Your Overdraft Limit Affect Credit Rating

If you are reducing your credit limit because you find yourself tempted to charge too much on your credit cards it may be worth a negative impact on your scores. Reducing the limits may help prevent greater credit problems in the future which is far more important than a decline in your credit scores.

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does reducing your overdraft limit affect credit rating

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But what do overdrafts mean for your credit.

Does reducing your overdraft limit affect credit rating. Your bank will charge an overdraft fee for the courtesy of paying transactions that exceed your bank balance. Would it be beneficial to reduce the limit or in fact could it be harmful to my credit rating. Perhaps a noddy q but is there any point to reducing the limit of an overdraft.

Reducing the overdraft limit may be considered as a new overdraft application by some banks which could mean a credit search which could affect your credit this search may consider you unsuitable for an overdraft and be refused. Your overdraft is how much you owe the bank and you reduce it by paying it off. Does an overdraft hurt your credit score.

Assuming of course that i would not be tempted to use the overdraft for anything more than an emergency but i have two credit cards for that anyway thanks cp. But there are some financial transactions you make in daily life that have no effect on your credit scoregood or bad. Changing your overdraft limit may get you credit checked but it seems hardly necessary for a reduction in overdraft limit except in barmy computer says no britain.

You are not credit checked when you do this. In fact it is a form of credit and using one responsibly will add to your credit history and improve your credit worthiness so it can be a really positive thing. If you ever want to borrow money whether its in the form of a mortgage or a credit card the health of your credit rating will be a key factor in how much you can borrow what rate you can.

In the normal run of things an overdraft shouldnt negatively impact your credit score. Your credit score is a powerful number based on how you pay certain bills like credit cards and loans. You might even have to pay a fee for each day your account remains negative.

Here are 10 activities you dont have to worry about hurting your credit score.

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