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  • FIRST POST
    • Hollypop
    • By Hollypop 24th Jul 09, 10:24 AM
    • 90Posts
    • 40Thanks
    Hollypop
    Why does my bank do a credit check to LOWER my overdraft?
    • #1
    • 24th Jul 09, 10:24 AM
    Why does my bank do a credit check to LOWER my overdraft? 24th Jul 09 at 10:24 AM
    I have an £800 overdraft with NatWest. I have been a NatWest customer for over 3 years now and have good credit with them, however in the last year i got a CCJ for an old credit card from 2005. so now i have a CCJ on file so i cannot get credit anywhere. Which i can cope with, However i am trying to pay off my over draft as i find i use it up to the max every month.

    I rang up NatWest and explained to the lady on the phone that i am trying to pay my over draft off a little each month so could they reduce it, say to £600 / £700 this month, then next month I'll reduce it again ect.
    The lady on the phone told me that they have to do a credit check to do this, even though it is LOWER amount to what i currently have, So it would just fail and get rejected, then be another bad mark on my crediit file. So she told me the only way to do it would be to save up the £800 then ring up and cancel the overdraft.

    I just dont understand why the bank has to do a credit check to lower the amount, i could understand if i wanted to up the limit then of course they would need to do a check. it just does not make sence to me.

    can anyone shed any light on this for me?

    Many thanks
    Holly
Page 1
    • Paul_Herring
    • By Paul_Herring 24th Jul 09, 12:59 PM
    • 6,050 Posts
    • 2,749 Thanks
    Paul_Herring
    • #2
    • 24th Jul 09, 12:59 PM
    • #2
    • 24th Jul 09, 12:59 PM
    Why does my bank do a credit check to LOWER my overdraft?
    To make sure that they shouldn't be lowering it even further than what you're asking for? (for example, they are quite entitled to withdraw the facility entirely after such a check.)

    Granted, for the numbers you're talking about it's probably unnecessary, but they've probably got a procedure in place to do this on any change of OD limit, and it can't be overridden.
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    • AirCooledHeaven
    • By AirCooledHeaven 24th Jul 09, 1:05 PM
    • 838 Posts
    • 399 Thanks
    AirCooledHeaven
    • #3
    • 24th Jul 09, 1:05 PM
    • #3
    • 24th Jul 09, 1:05 PM
    It's laudable that you want to reduce your current overdraft, but why would you want to reduce the overdraft facility? If you have a problem getting credit then an overdraft facility is worth having as long as it's only used for genuine emergencies or short term cash flow problems. If you have a CCJ it may be harder to put it back up again when you really need it.
  • londonuk2008
    • #4
    • 24th Jul 09, 1:26 PM
    • #4
    • 24th Jul 09, 1:26 PM
    strange as when I recently 'upped' my overdraft limit - they did not credit check me?
    • becky_rtw
    • By becky_rtw 24th Jul 09, 1:35 PM
    • 8,214 Posts
    • 15,038 Thanks
    becky_rtw
    • #5
    • 24th Jul 09, 1:35 PM
    • #5
    • 24th Jul 09, 1:35 PM
    I just lowered mine and they didnt credit check me either - go into branch and try it - they just do it over the counter and it changes overnight
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    • hollypop
    • By hollypop 25th Jul 09, 9:44 PM
    • 39 Posts
    • 18 Thanks
    hollypop
    • #6
    • 25th Jul 09, 9:44 PM
    • #6
    • 25th Jul 09, 9:44 PM
    Thanks for the advice, i may try and go in the branch as they may not be as restricted to do things the same ways as the online banking or the call centres, so they may be able to lower it without a credit check.

    I know i have problems with my credit, but every month i use my overdraft, i cant stop myself using it, so the best thing for me is to just pay it off and cancel it, however it would just have been nice to pay a little off each month and then lower it rather than having to save up the full £800 then cancelling it.

    Also i've just thought, are you sure that in branch they may still do a check but didnt necesarily tell you?
    • stclair
    • By stclair 25th Jul 09, 9:54 PM
    • 6,240 Posts
    • 3,344 Thanks
    stclair
    • #7
    • 25th Jul 09, 9:54 PM
    • #7
    • 25th Jul 09, 9:54 PM
    Natwest will do a credit check every time you reduce your limit. As in theory they are effectively taking the facility away and giving you a new overdraft at a lower limit silly i know.

    It wont matter how you do it regardless it being via telephone banking or branch the same procedure applies.
  • Extant
    • #8
    • 25th Jul 09, 10:04 PM
    • #8
    • 25th Jul 09, 10:04 PM
    Natwest will do a credit check every time you reduce your limit. As in theory they are effectively taking the facility away and giving you a new overdraft at a lower limit silly i know.
    Originally posted by stclair
    Fairly obviously not the reason, as they don't credit score when facilities are removed or reduced centrally for non-use, abuse, etc.

    Sounds more like a system process that wasn't thought out.
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    • stclair
    • By stclair 25th Jul 09, 10:08 PM
    • 6,240 Posts
    • 3,344 Thanks
    stclair
    • #9
    • 25th Jul 09, 10:08 PM
    • #9
    • 25th Jul 09, 10:08 PM
    Fairly obviously not the reason, as they don't credit score when facilities are removed or reduced centrally for non-use, abuse, etc.

    Sounds more like a system process that wasn't thought out.
    Originally posted by BarclaysManager
    Yeah it is a system process a very silly one too.

    Natwest used to offer reducing overdrafts so it was automatically reduced by say £50.00 on a certain date of the month.

    However there no longer offered for some reason.
    • hollypop
    • By hollypop 7th Sep 09, 3:44 PM
    • 39 Posts
    • 18 Thanks
    hollypop
    I have just come off the telephone to a nice lady at NatWest, by calling a different department on 0845 300 5017 (not sure which department)

    she has just told me that if i want to lower my overdraft i can. Online it goes through the credit checking, however if they do it through their department they can override the decision.

    She said it seems stupid if a customer had trouble with their overdraft or debt and wanted to reduce it, why they wouldnt help!

    so everymonth i can now ring that number and get them to reduce it by however much i want to untill it is payed off.

    (although saying all this she did try to convince me it was best to keep the whole £800 overdraft and just not use it)
  • blue35
    funny , when I applied to increase my overdraft a couple of times it give me what I asked - without any credit checks?
    • foxy-roxy
    • By foxy-roxy 7th Sep 09, 4:34 PM
    • 857 Posts
    • 1,128 Thanks
    foxy-roxy
    When i was with Barclays they used to up my limit on the phone with no checks, and RBS gave me a overdraft and upped it without the credit check.
    Every bank must have different policies.
    • willo65
    • By willo65 7th Sep 09, 5:42 PM
    • 1,001 Posts
    • 348 Thanks
    willo65
    I think you'll find that although you are told a credit check will be performed because this is what the system says that the check may not actually be done if you are just reducing your limit if anyone has reduced their limit and checked their credit file would be interested to know.
    • hollypop
    • By hollypop 8th Sep 09, 2:49 PM
    • 39 Posts
    • 18 Thanks
    hollypop
    they definatly do a check online as i applied for a £700 overdraft instead of 800 and it got rejected!
    • PinkPig
    • By PinkPig 8th Sep 09, 8:05 PM
    • 233 Posts
    • 90 Thanks
    PinkPig
    Maybe they treat asking to reduce your limit as a warning sign? After all, there's never any actual financial benefit in doing it - the only sensible reason for asking for a lower limit is that you think you won't be able to control your spending without it.

    Just a thought about the possible sane reasons for doing a credit check.
    • willo65
    • By willo65 8th Sep 09, 9:15 PM
    • 1,001 Posts
    • 348 Thanks
    willo65
    Maybe they treat asking to reduce your limit as a warning sign? After all, there's never any actual financial benefit in doing it - the only sensible reason for asking for a lower limit is that you think you won't be able to control your spending without it.

    Just a thought about the possible sane reasons for doing a credit check.
    Originally posted by PinkPig
    It could help when applying for loans etc if the financial instituation you want a loan from takes into account current credit available to you so if you have an o/d for £5k which you only use £2k then is worth reducing.
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