Does an overdraft affect a credit score?

An overdraft can affect your credit score depending on how you manage it. Using an authorized overdraft within its limit and repaying it on time generally does not harm your score and can demonstrate responsible borrowing behavior. However, it can negatively impact your credit score if:

• You exceed your sanctioned limit or use an unauthorized overdraft.
• You fail to repay the overdrawn amount, leading the bank to report it as a default.
• Frequent applications for new overdraft facilities result in multiple hard inquiries.