Does anyone know how an overdraft facility figures into your credit rating when you apply for a mortgage in the UK?

I have arranged to have a short-term overdraft facility (not huge just 1,000 quid) at my UK bank (I currently live in the US). Within the next few months I'll be paying in so it will go away pretty quickly. It's all to do with exchange rates, juggling finances, you all have been through it. Just a lot simpler and more convenient to have a short-term overdraft for now.

My concern is whether, if I apply for a mortgage in say 12-24 months time, this temporary (pre-arranged) overdraft will go against my credit rating?

[Just to clarify, I'm talking purely about my UK credit rating, UK mortgage, UK bank].

Hi D, have you remained a voter in the UK? The reason I ask that all credit is checked against the voters roll in the UK. We were outside the UK for a number of years and when we came back had to start from scratch as we were unknown, (apart from the fact that we are British!)
Took nearly 3 yrs to get credit of any kind, but I think it is a bit easier now. However on all applications for credit (mortgage included) they ask for length of time at current address, and if less than 3 yrs, the previous address etc. If it is outside the UK it is difficult to track you so are not all that happy to give credit.
As you already have a bank account maybe it will be easier.
As for the overdraft having any bearing on mortgages I am not sure. Thay gave you the facility so they must be quite happy with the way you are handling your account, it is not always how much you have in the account but the way it has been used.
Best of luck.

On our return to the UK we were recommended on more than once occasion to get an overdraft. We have never had one in our lives.

If used in the positive way as we did, let the account dip in the red for a few days then pay it back this seemed to put us on the credit radar, a good debt thing.

This in turn allowed us to get a credit card which we use and pay off each month, again to keep you credit active as such otherwise the first 12 months back can be tough without history.

Very important to get yourself on the voters role ASAP.

Not sure if this is correct, just our experience.

M

Thanks, both.

Coincidentally, I have just applied to be put on the UK voters' roll (as I have never been on it in my life), so that should help a bit.

Also, despite being overseas since 1983, I have kept a UK current account, savings account, and cash ISA, and a UK credit card (Barclaycard) that I use quite frequently.

I did get a UK mortgage (special one for people buying to let) last summer so hope that will help too.

The comment on getting an overdraft and the "using it sensibly" makes a lot of sense. I guess it's a bit like having a credit card here in the US even if you don't need one - just so when you apply for a mortgage they can see that you use credit wisely.

The voters register is the important bit, as that does get checked for proof of address.
An overdraft however is normally between you and the bank, and doesn't show on your credit rating (unless you start to default on payment) - unlike a credit card application or loan application. It just shows up if the bank starts to think you may be "trouble".

That's interesting about the overdraft bit as it was our two banks that recommended for us to do this, maybe they were after our £££ for interest repayments.

M