Which Bank to stay with???

littlechezza

we are in a situation at the moment where we are with 3 banks, we are paying overdrafts off and the plan was to close 2 and keep the one we have our wages and direct debits with, the 2 we were going to close were Lloyds TSB and Nationwide and stay wth Alliance & Leicester, I would appreciate suggestions as to whether this is the sensible option.
Thanks

LongTermLurker

Nationwide is useful if you travel abroad (no foreign currency charges to use your debit card) but I think A&L's website and CS sucks big style!

Reports suggest Nationwide's CS isn't great, but I find it hard to imagine it being worse than "Sprocket & Sylvester"...

littlechezza

I thought this would show on our credit score or doesn't it make any difference once the overdrafts are paid off.

LongTermLurker

littlechezza wrote: »

I thought this would show on our credit score or doesn't it make any difference once the overdrafts are paid off.

Sorry, I don't understand the significance. Assuming it's authorised, an overdraft is just an ongoing credit agreement. While you are "in" the overdraft, your credit report will show the size of the available overdraft, how much you still owe and the payments you've made towards it each month (I think). Once your overdraft is paid off, you still have an overdraft facility, so it will still show on your file, but will show as, say, £5000 available, owing nothing. From paying it off to it showing on your file could take up to 3 months.

If you apply for credit, the provider will take into account your income, available credit and used credit to decide whether to lend you anything. Hope that helps.

littlechezza

Sorry longtimelurker I was replying to the reply from justask, I just thought that the amount of bank accounts you have open has an impact on your credit score even if the overdrafts are paid off, does this make sense, I dont know if I'm babbling on, does this mean tha even if you have a limit of £1000 on your overdraft if you don't use it your credit score is not affected.
Thanks

sofa_surfer

If you've banked with one of the 3 banks for significantly longer period than with the other two, I would've kept that one open as well (with £0 available overdraft as to not worsen your available/used ratios). It is handy for any future finance related applications.

LongTermLurker

littlechezza wrote: »

Sorry longtimelurker I was replying to the reply from justask, I just thought that the amount of bank accounts you have open has an impact on your credit score even if the overdrafts are paid off, does this make sense, I dont know if I'm babbling on, does this mean tha even if you have a limit of £1000 on your overdraft if you don't use it your credit score is not affected.
Thanks

Hi, yes, you're right (the bold bit) - and that's what I meant in my last paragraph. Having 3 unused overdrafts gives you x amount of available credit, and that will affect what lenders are willing to offer you weighed against your income. If you earn £30k, have lived in your own house for more than 3 years, are registered on the electoral role, been with the same employer & bank for a good few years and always kept up your repayments, then 3 unused £1000 overdrafts wouldn't be held against you. On the other hand, if several of the above assumptions were wrong, then you would be better getting rid of the available credit and waiting 3 months for your credit file to calm down.

Hope that helps.