Posted on: 29-11-05 09:04:48
Hello,
I have a OD factility from a bank. Does it affect my credit if my account goes into OD for a day or two (the amount is nominal and well under the negotiated OD amount)? Thanks.
Quote:
Orginally posted by medhora
Hello,
I have a OD factility from a bank. Does it affect my credit if my account goes into OD for a day or two (the amount is nominal and well under the negotiated OD amount)? Thanks.
It will only affect your credit if you default in payment. Infact if you use your OD facility and pay it back on time, it improves your credit history.
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Reiki Grand Master
IMHO....O/D protection is to used as a last resource.....as there are heavy charges one has to pay for using the same.....the interest charged could be very high and as such if you end up using your O/D facility on a regular basis (even if you end up paying it back on time).....it still affects your credit a little bit....coz it implies to the credit bureau....that you do not have cheaper credit facility available.....so don't use it period.....the idea behind O/D protection is to ensure that none of your Pre auth payt/cheques that you issue are returned due to insufficient funds.....
If you want to improve you credit history....use your credit card for everything that you can......it has many advantages.....firstly, you use free credit facility for few days.....you may get more value for the money that you spend using credit card if it's a dividend card or gives you points for every dollar that you spend.....pay you bill if full (if you can)....atleast 3-4 biz days before due date to avoid interest chgs.....even if you do pay interest....it won't be as high as O/D protection......
Once you have used your credit card for 6-8 months.....and managed to pay it in full every month.....you may want to consider obtaining a small line of credit for emmergency use.....the APR on plc is much lower than credit card....
Hope this helps....
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Let's help each other to grow & prosper in Canada
Quote:
Orginally posted by reachash
IMHO....O/D protection is to used as a last resource.....as there are heavy charges one has to pay for using the same.....the interest charged could be very high and as such if you end up using your O/D facility on a regular basis (even if you end up paying it back on time).....it still affects your credit a little bit....coz it implies to the credit bureau....that you do not have cheaper credit facility available.....so don't use it period.....the idea behind O/D protection is to ensure that none of your Pre auth payt/cheques that you issue are returned due to insufficient funds.....
If you want to improve you credit history....use your credit card for everything that you can......it has many advantages.....firstly, you use free credit facility for few days.....you may get more value for the money that you spend using credit card if it's a dividend card or gives you points for every dollar that you spend.....pay you bill if full (if you can)....atleast 3-4 biz days before due date to avoid interest chgs.....even if you do pay interest....it won't be as high as O/D protection......
Once you have used your credit card for 6-8 months.....and managed to pay it in full every month.....you may want to consider obtaining a small line of credit for emmergency use.....the APR on plc is much lower than credit card....
Hope this helps....
Well said Aashish ji,
However, I am not sure that these small OD arrangements ( on checking accounts) are reported to the bureau by the bank. At least I have never seen these being reported. Does CIBC report these little outstandings to the bureau?
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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
Quote:
Orginally posted by Pramod Chopra
Quote:
Orginally posted by reachash
IMHO....O/D protection is to used as a last resource.....as there are heavy charges one has to pay for using the same.....the interest charged could be very high and as such if you end up using your O/D facility on a regular basis (even if you end up paying it back on time).....it still affects your credit a little bit....coz it implies to the credit bureau....that you do not have cheaper credit facility available.....so don't use it period.....the idea behind O/D protection is to ensure that none of your Pre auth payt/cheques that you issue are returned due to insufficient funds.....
If you want to improve you credit history....use your credit card for everything that you can......it has many advantages.....firstly, you use free credit facility for few days.....you may get more value for the money that you spend using credit card if it's a dividend card or gives you points for every dollar that you spend.....pay you bill if full (if you can)....atleast 3-4 biz days before due date to avoid interest chgs.....even if you do pay interest....it won't be as high as O/D protection......
Once you have used your credit card for 6-8 months.....and managed to pay it in full every month.....you may want to consider obtaining a small line of credit for emmergency use.....the APR on plc is much lower than credit card....
Hope this helps....
Well said Aashish ji,
However, I am not sure that these small OD arrangements ( on checking accounts) are reported to the bureau by the bank. At least I have never seen these being reported. Does CIBC report these little outstandings to the bureau?
Not all banks report small O/S bal on O/D protection....I have seen credit bureaus of few customers where their banks did report the same....no fix rule.....so far I haven't seen the bank in Q having rptd O/D protection to credit bureau
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Let's help each other to grow & prosper in Canada
