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Surely itâs best to just keep it on if you have a need for it?
What if you werenât eligible one month? Once youâve got it, it could be taken away but you get more notice about that than just not being able to turn it on.
Itâs difficult to say the impact it has on your credit report because everyone is in a different situation and some things are cared about more by some lenders than others when assessing you⊠generally though, if itâs well managed then an overdraft wonât hurt your credit report and may well help you.
Not sure how such behaviour you use at present would be reported though?
In my opinion, keep it on because it will show as available credit on your report.
Isnât the overdraft a hard credit search on your account?
That would mean a hard credit search every month you turn it on and off, credit ref agencies would be having kittens!
Iâve worked with a number of lenders and each one cached the results within a certain timeframe (usually a month or two) and use these instead of searching each time - even across different product lines for some of them.
Not only would it start to ruin a personâs credit file by making them seem desperate for credit but it would also rack up some unnecessary costs for the lender. Some solutions Iâve seen cost as much as ÂŁ50 to score somebody!
Of course, I have no idea what Monzo is doing or even if they would release this sort of info⊠Letâs hope that it hasnât affected this user.
Not sure. I guess with a âtraditionalâ bank, cancelling and then re applying for your overdraft every month would probably require a credit search each time which is regarded as a negative on your credit file I think.
Not sure if âswitching it off/onâ with Monzo has the same effect but probably best to keep it open I think.
If youâre worried that youâll find it too tempting though then maybe leave it off and only put it on if you absolutely need it, and try and build up a contingency savings pot which you can dip into if needed (I am aware this is easier said than done - believe me Iâm in my 40âs and although my finances are ok now, it hasnât always been this way! If youâve avoided using your overdraft until now, Iâd advise trying to keep it that way if at all possible!