Savings account with poor credit rating

LotsaLuck · 18 June 2013 at 3:28PM

Hello,

I was subject to a debt relief order in 2010, discharged Sept 2011. During this time, I opened a new current account with the Co-op and in Jan 2012, I asked them if I could also have a savings account (a basic instant access) but was refused, presumably because of my poor credit rating. I have only had this current account since then - I have no other bank / credit / savings accounts, and I have improved my personal financial situation (although clearly my credit rating will remain very poor for some years to come). I'd like to find a savings account (again, just a basic instant access one, I have £1000 to put in and am aiming to save up to £5000 over the next year) and I don't know whether I should approach the Co-op again? Or look elsewhere? Anyone any experience in this? Maybe I should apply for a poor-credit-credit-card instead to try and build up my credit rating first...??

Thank you

LittleVoice · 18 June 2013 at 3:46PM

Is your current account with the Co-Op now in credit throughout the month?

I don't see why your credit rating, whatever it is, should affect your ability to open a savings account with another institution. They want ID, of course, but your payment history shouldn't bother them AFAIK.

Are you a member of the Co-Op?

LotsaLuck · 18 June 2013 at 3:51PM

Hi LittleVoice, thanks for your response, you wouldn't think it would affect your chances, but after several google searches, it seems I'm far from alone. I don't understand it either. Yes, my co-op current account is always in credit, it doesn't have an overdraft facility, I manage my finances better these days

LittleVoice · 18 June 2013 at 4:23PM

LotsaLuck wrote: »

Hi LittleVoice, thanks for your response, you wouldn't think it would affect your chances, but after several google searches, it seems I'm far from alone. I don't understand it either. Yes, my co-op current account is always in credit, it doesn't have an overdraft facility, I manage my finances better these days

And the other question was "are you a member of the Co-Op?"

Are the stories about being declined savings accounts told by US or UK residents? Do they refer to "checking accounts"?

LotsaLuck · 18 June 2013 at 5:22PM

Oh.. yes I am a member.

And yes, having reviewed the pages I've looked at, all cases are UK, referring to UK banks.

innovate · 18 June 2013 at 5:57PM

The reason for rejection would not be a poor credit rating. Credit ratings, as worked out by credit reference agencies, are totally meaningless, anyway. And no bank would work out a credit rating themselves for any savings account.

What could be a reason is if the personal data (name, address, DOB etc) used in the application do not tally the data held on the CRA file(s), and or the Electoral Register.

LotsaLuck · 18 June 2013 at 6:02PM

So based on that logic, then, it should do my credit file no harm to reapply for a co-op savings account and then ask them why if I'm rejected? (After I've initially checked all my personal data myself)

markwilkinson · 18 June 2013 at 6:14PM

It might be worth ignoring the coop savings account and looking elsewhere, especially if you can find an account with a better interest rate.

I've read on here before that Banks can put 'markers' on people's accounts to stop them from being offered further products and services. It may well be that the coop, knowing your history have done something like that to you? Applying to another institution won't affect your credit rating as they won't do a credit check, just check your on the electoral roll etc.

Applying will do nothing negative or positive to your credit rating but having a savings account/ISA might make you feel a bit more 'mainstream' and positive about your financial outlook.

All the best OP.

LotsaLuck · 18 June 2013 at 6:20PM

Thank you, given that information, then, I might as well find an account I want and apply. I thought the co-op might be my best bet given that (a) I already bank (with no problems) with them and (b) they gave me the current account after I'd informed them of my DRO. I'm certain I'm on the electoral roll, and all my credit file details are correct, so I guess I'll just have a look around and give it a go. Thanks all.

innovate · 18 June 2013 at 6:53PM

You are quite likely to find a savings account that pays better interest than the Coop does, anyway. If you are a tax payer, try to find a cash ISA because that pays you the interest without any tax deduction.

Check post 1 of this thread for the best currently available cash ISAs https://forums.moneysavingexpert.com/discussion/401374

LotsaLuck · 28 June 2013 at 1:21PM

Just a little update in the spirit of giving information to anyone who might be in this same situation..

I applied once more for a savings account with my current account holder, Co-op, who sent me a rejection letter based on having viewed my credit file. The same happened with one more company, then I was accepted by Sainsburys for an instant saver account (after being asked to provide identification documents). None of these searches seemed to have appeared on my credit file, at least not yet, so I'm happy not to have made the situation worse for myself so far.

Onwards and upwards!

Savings account with poor credit rating

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