Switching overdraft on/off - credit score

I switch my overdraft (£1000) on and off for 3 days around the end of the month as my rent is due on the 23rd and i get paid on 24th.

In terms of credit scores - does anyone know whether it is better to keep it constantly switched on and to dip in for three days a month or to switch it on and off each time?

Surely it’s best to just keep it on if you have a need for it?

What if you weren’t eligible one month? Once you’ve got it, it could be taken away but you get more notice about that than just not being able to turn it on.

It’s 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 it’s well managed then an overdraft won’t hurt your credit report and may well help you.

Not sure how such behaviour you use at present would be reported though?

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In my opinion, keep it on because it will show as available credit on your report.

Thanks for both of your insights - will leave it on!

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Isn’t 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!

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I’ve 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 person’s credit file by making them seem desperate for credit but it would also rack up some unnecessary costs for the lender. Some solutions I’ve seen cost as much as £50 to score somebody!

Of course, I have no idea what Monzo is doing or even if they would release this sort of info… Let’s hope that it hasn’t affected this user.

Not sure. I guess with a “traditional” 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 “switching it off/on” with Monzo has the same effect but probably best to keep it open I think.

If you’re worried that you’ll 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 I’m in my 40’s and although my finances are ok now, it hasn’t always been this way! If you’ve avoided using your overdraft until now, I’d advise trying to keep it that way if at all possible!


Definitely not. Most legacy banks have their own scoring. They do not check credit file when you apply for overdraft. I asked Barclays, Lloyds, HSBC…

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