Answer to Question #243283 in Management for April

Question

It is three years since any food and Beverage outlets have been decorated, and they are starting to look shabby. The General Manager has been given an estimate of £250,000 to redecorate them. He has told you he plans to finance this by paying creditors late and using an overdraft. What would you advise him to do?

Answer 1

If you go over your arranged overdraft limit, your bank will report this to your credit file. A prolonged period of being in an unarranged overdraft could lead to the bank defaulting your account, which will be recorded on your file for six years.The reporting date is at least 30 days after the payment due date, meaning it’s possible to make up late payments before they wind up on credit reports. Some lenders and creditors don’t report late payments until they are 60 days past due. Therefore, it’s important to note that even if a late payment doesn't show up on credit reports immediately, late fees may be applied quickly after the due date. Thus, if you have missed a payment on your account by 30 days or more, but you are able to pay it before the next payment due date, your lender or creditor should report the account as being current, but the late payment that they may have already reported will remain on your credit reports for seven years.