Credit despite overdraft or direct debit
Take out a loan in spite of overdraft facilities or despite direct debits, here you will find tips on the conditions under which you can get a loan despite these obstacles. You will also find out whether return debits and overdraft facilities appear in the creation file.
Constant use of overdraft facilities and tolerated overdrafts, as well as the appearance of return debits, can be symptoms of serious payment difficulties.
If this is the case, it is primarily a matter of consolidating finances, possibly with the help of debt advice centers, and not of taking out new loans. This article is aimed at readers who, in principle, can afford another loan despite a direct debit and a credit line.
For this group of people, we provide a comparison calculator at the end of the article with which the cheapest loan solution can be found.
Overdraft facility & return debit: the impact on the creditworthiness
Banks double-check the customer’s credit rating before taking out any loans.
On the one hand, a creditworthiness check is carried out on the basis of the documents sent with the loan request and, if necessary, on the basis of bank information. Banks determine whether there is enough freely disposable income to repay the desired loan in accordance with the contract.
Bank information and the evaluation of bank statements are used to determine how serious the customer’s account management has been in the recent past.
The credit check regularly begins with the collection of information from credit bureaus like Credit Checker. If negative characteristics that have not yet been resolved are identified, banks generally no longer conclude loan agreements.
In the case of a loan despite overdraft facilities or return debits, the first question is to what extent relevant information can be found in the Credit Checker information.
Return debit due to insufficient cover & Credit Checker
Return debit means that a direct debit is posted back because it could not be executed.
The amount requested with the direct debit is credited to the account holder again, while the account of the person who initiated the direct debit is debited with the corresponding amount. As a rule, direct debits are made because the account of the debtor does not have the necessary funds.
But there are other reasons. For example, the obligated account holder can have a direct debit canceled because he considers the underlying liability to be unjustified.
The return debit itself is not entered in the Credit Checker. This also applies to a return debit due to insufficient cover. Credit Checker knows no reporting feature for this incident.
The direct debit alone is not a reportable breach of contract. However, it can become a reportable breach of contract. This is the case if the claim on which the return debit is based is not contradicted and a reminder procedure is initiated. As a result of these dunning procedures, the claim may also be reported as uncollectible if the account holder does not pay.
Dispo & Credit Checker
A granted credit line is reported to Credit Checker, as is the setting up of a checking account.
However, the corresponding Credit Checker entry is not negative, but neutral or can even be regarded as a positive credit rating. Credit Checker finds out nothing about the use of the overdraft facility within the granted credit line.
If the overdraft facility is exceeded, there are different case groups.
- The overdraft of the overdraft facility was previously agreed with the bank. A negative Credit Checker entry is not made.
- The bank tacitly tolerates the overdraft. This fact also does not lead to a negative feature.
- The bank does not accept the overdraft of the overdraft limit but points out the breach of contract. The bank then has the right to report this incident to Credit Checker as not in accordance with the contract.
In most cases, however, there will be no tolerated over-drafting of the overdraft limit at all because the bank will not carry out the relevant orders.
If this does happen, you have to reimburse the excess immediately or make a payment agreement with the bank in order to avoid a negative Credit Checker entry.
The situation is complicated when the bank has accepted overdrafts for a certain period of time, but then suddenly insists on behavior contrary to the contract.
If the bank allows the overdraft limit to be exceeded for a certain period of time, this may be seen as an implied contract change. The bank has tacitly agreed to an increase in the overdraft limit. If a negative feature is nevertheless reported to Credit Checker, you can possibly take action against it.
The legal assessment of such incidents is not easy. It is therefore advisable to consult a lawyer or an advice center.