Methods for quickly eliminating your overdraft.
How to Pay Off Your Overdraft Quickly
If I go into overdraft, what happens if I can't pay it back?
It’s important to notify your bank immediately if you’re having trouble paying back your overdraft, as this can affect your credit history.
Financial institutions are obligated to serve their clients fairly and may be able to locate a more cost-effective means of borrowing and debt consolidation for you.
Your credit may take a hit if you exceed your predetermined overdraft limit and are unable to repay the amount you owe.
If this continues for a long time, the bank may default your account, which will appear on your credit report for up to six years and make it more difficult to borrow money in the future. This is known as having an unauthorised overdraft.
What happens to my credit rating if I use my overdraft?
If you have an overdraft arrangement and use it infrequently, it probably won’t hurt your credit score too significantly. If you treat your overdraft like a credit card and pay it off in full every month, it will demonstrate that you can manage credit responsibly and may even improve your credit score.
However, if you go beyond your approved amount, it will reflect poorly to future lenders and lower your credit score. One of the most important techniques to improve your credit score is to diligently manage your credit and bills.
Where can I find a reputable debt counselling agency?
Charities such as Citizensadvice.org.uk (Tel: 03444 111444), Nationaldebtline.org (Tel: 0808 8084000), and Stepchange.org (Tel: 0808 1381111) provide free advice if you are trying to pay off your overdraft and have debt issues.
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