Credit Building > Can you get an overdraft without a credit history?

Can you get an overdraft without a credit history?

Wollit Team2 minute read · Updated 29th June 2024

Getting an overdraft facility without a credit history can be very difficult if not outright impossible. Here’s why:

Banks assess overdraft applications based on your creditworthiness, which is determined by your credit history and score. If you have never borrowed in the UK, the bank has no way to know if you can manage debt responsibly.
Any loan application in the UK requires a full credit check. It’s a legal requirement. If you have never had any credit accounts before, you will have an empty credit report, making it very unlikely the bank will approve you for an overdraft.
Overdrafts are usually given to existing current account customers who have shown responsible financial behaviour over time. As a new customer with no history, you will be seen as a higher risk.

Can I get an overdraft with a basic bank account?

Basic bank accounts are meant for people with poor or no credit history. They usually charge no monthly account fee, and give you access to basic banking services, like online banking and a debit card.

However, they do not have an overdraft facility. While this makes them less risky both for you and the bank, it means that you’ll need to eventually build your credit history and improve your credit score if you want to qualify for a full bank account – one that comes with an overdraft option.

How can I build my credit history so I can get an overdraft?

The most common way to build up a credit history is to get a credit builder card. After 6-12 months of on-time payments, your credit score will usually improve, and you can then apply for an overdraft with a better chance of approval.

However, credit building cards charge excessive interest rates and fees (between 35-55%) and have very low starting credit limits (usually as low as £250).

This can make it likely that you're going to miss a payment because it’s unaffordable or go over your credit limit because it’s very low. Both of these can actually hurt your credit score instead of helping it.

A safer approach is to download a specialised credit building app. One such app is Wollit.

Building your credit history with a credit card requires you to first buy things on debt and then repay them as soon as possible. With Wollit, you only need to pay a fixed monthly subscription. Wollit then reports this subscription as a loan repayment to the credit reference agencies (Experian, Equifax, and TransUnion).

This directly builds your credit history, which is what matters for your credit score, while keeping you safe from high interest charges, maxed-out credit limits, or getting into more debt.