An overdraft is a type of credit that gives you the ability to withdraw more money than you have in your current account. Since this is a type of credit, it will appear on your credit report as debt, but that may not necessarily be a bad thing: it depends if you’ve made an authorised or unauthorised overdraft.
An authorised overdraft is one that you have applied for with your bank and have been approved. The bank will set a spending limit on the overdraft and will usually charge interest on any spending.
An unauthorised overdraft is one you have not applied for, but the bank is willing to let you take out money even when you have no available funds to provide you with more flexibility. This type is typically more expensive than authorized.
Authorised overdrafts will likely not have a significant impact on your credit score if you stay within the pre-agreed overdraft limit. They could even help your credit score if you consistently pay off your overdraft, which indicates to your bank that you are a reliable borrower.
However, unauthorised overdrafts, including going over your pre-agreed overdraft limit, may negatively affect your credit score.