Why does my bank do a credit check to LOWER my overdraft?

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

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

they definatly do a check online as i applied for a £700 overdraft instead of 800 and it got rejected!

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

PinkPig wrote: »

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.

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.