New Delhi, June 19 -- An overdraft is essentially a credit facility that allows an individual to withdraw more funds than are available in their bank account. This extension is permitted up to a pre-approved limit.

Therefore, a sanctioned borrowing limit is a key component of an overdraft facility. While this feature can provide financial support during emergencies or challenging situations, its impact on your credit score largely depends on how responsibly you use and manage it.

The principle is simple: if you manage this facility wisely, it can help you build a positive credit history. However, failing to meet repayment obligations or clear outstanding dues on time can negatively affect your credit score.

An overdraft does not automa...