A Q for the Natwest experts - internal and external credit checks and an IVA

notmyrealusername

I have recently finished an IVA (formal insolvency procedings - step before bankruptcy) by way of a full and final settlement after 3 years. I have well and truly learnt my lesson where credit is concerned and never intend to get into debt again, other than a mortgage which is what brings me to my question!

I want to improve my credit reports for the future potential mortgage by having a small overdraft facility. Internally I would imagine I look like a good customer, the account has been run perfectly for 3 years never going overdrawn etc but if they consult the external credit refs then they wouldn't touch me with a bargepole!

Sooo, my question is: I currently have a current account - with Maestro card and chequebook - which was opened just prior to starting the IVA 3 years ago. If I was to apply for a small overdraft (£50 or so) will they check externally for such a small amount? If they do check externally and therefore decline me, are they likely to make any decisions about my account as a result of seeing the IVA on my credit files ie downgrade me or close the account?

Thanks for any input

firsttimestudent

Natwest has what is termed 'pre-approved' limits. Anything under the pre-approved limits will be accepted without external CRA checks (source: own experience, also numerous posts on this!) If you go to a branch they can tell you the pre-approved limit, and the bank staff will be able to tell you whether you're likely to get the amount you want.

By the way, Natwest's Overdraft limits do not show on Experian... at least when I last checked!

never-in-doubt

Overdrafts will have no bearing on any future credit. You need a credit account, not short term (repayable on demand) debt, such as a credit card or catalogue account.

Regards to Natwest, I always thought that in online banking, click overdrafts and in the text above the amount you want to apply for it will show you the amount pre-approved?

But overdrafts will do nothing to help your credit file, nor for that matter will the actual bank account itself.

If the IVA is 3 years old, then you'll still have markers on your credit file (3 years left) so you'll get little or no offers of credit until this has been totally erased (after 6yrs usually)....

Have a read here to learn about CRA's: Credit Reference Agencies

notmyrealusername

Had a look at the online banking, I clicked on the 'apply online' but there were lots of steps and it was asking about old addresses which made me wary it was going to do an external credit check so I chickened out and closed it down!

Will do as the previous poster suggested and ask in the branch next time I'm there.

never-in-doubt wrote: »

If the IVA is 3 years old, then you'll still have markers on your credit file (3 years left) so you'll get little or no offers of credit until this has been totally erased (after 6yrs usually)....

Have a read here to learn about CRA's: Credit Reference Agencies

Thanks, will have a read...

I know the IVA will remain on my credit file for the next 3 years and I don't intend to try for a mortgae within that timeframe as I need to save for a deposit first. What I'm trying to avoid is at the 6 year mark the IVA coming off the files and then me having no credit history whatsoever which from what I've read can be worse than adverse credit history!

stclair

notmyrealusername wrote: »

I have recently finished an IVA (formal insolvency procedings - step before bankruptcy) by way of a full and final settlement after 3 years. I have well and truly learnt my lesson where credit is concerned and never intend to get into debt again, other than a mortgage which is what brings me to my question!

I want to improve my credit reports for the future potential mortgage by having a small overdraft facility. Internally I would imagine I look like a good customer, the account has been run perfectly for 3 years never going overdrawn etc but if they consult the external credit refs then they wouldn't touch me with a bargepole!

Sooo, my question is: I currently have a current account - with Maestro card and chequebook - which was opened just prior to starting the IVA 3 years ago. If I was to apply for a small overdraft (£50 or so) will they check externally for such a small amount? If they do check externally and therefore decline me, are they likely to make any decisions about my account as a result of seeing the IVA on my credit files ie downgrade me or close the account?

Thanks for any input

Its not worth the credit search the IVA will get you an automatic decline.

You should ask in branch or call actionline and asked to be put through to lending if you have any pre approved limits there the best people to ask .

notmyrealusername

stclair wrote: »

Its not worth the credit search the IVA will get you an automatic decline.

You should ask in branch or call actionline and asked to be put through to lending if you have any pre approved limits there the best people to ask .

Thanks, do you know mean that applying online for a tiny overdraft would generate an external credit search then?

When I was a few months into my IVA they wrote to me saying they'd given me a £500 overdraft, which I quickly declined as you're not allowed credit facilities in an IVA, so they obviously hadn't externally checked me then!

Do the 'pre-approved' limits mean that they will give me X amount without externally credit checking? Am really concerned about a downgrade or withdrawal of facilities if they find out about my past IVA

stclair

notmyrealusername wrote: »

Thanks, do you know mean that applying online for a tiny overdraft would generate an external credit search then?

When I was a few months into my IVA they wrote to me saying they'd given me a £500 overdraft, which I quickly declined as you're not allowed credit facilities in an IVA, so they obviously hadn't externally checked me then!

Do the 'pre-approved' limits mean that they will give me X amount without externally credit checking? Am really concerned about a downgrade or withdrawal of facilities if they find out about my past IVA

Yes applying online would generate an external credit score even if it was £10.00.

Even if you have pre approved limits there is still a chance it may get credit scored.

Plus as your in an IVA you dont wont to risk a possible account closure.

notmyrealusername

stclair wrote: »

Yes applying online would generate an external credit score even if it was £10.00.

Even if you have pre approved limits there is still a chance it may get credit scored.

Plus as your in an IVA you dont wont to risk a possible account closure.

Thanks - that's good to know, I definitely won't be applying online then!

I'm not actually in an IVA any longer - it was completed via a full and final settlement (it will still show on my credit files for a further 3 years though). Would they still be looking to close my account? If so I think I'll give the small overdraft idea a complete miss!

stclair

notmyrealusername wrote: »

Thanks - that's good to know, I definitely won't be applying online then!

I'm not actually in an IVA any longer - it was completed via a full and final settlement (it will still show on my credit files for a further 3 years though). Would they still be looking to close my account? If so I think I'll give the small overdraft idea a complete miss!

Even though your no longer in an IVA it will still be on your credit file and is deemed as adverse data until it drops off.

They may not close your account however it isnt a risk you wont to take really for the sake of a £50.00 overdraft that is repayable on demand anyway.

notmyrealusername

Yep, I think you're right. I was hoping that a small overdraft might lead to a small credit card with them to prepare my credit files for a future mortgage but I don't think I want to take the risk based on the info you've provided. Thanks very much

stclair

notmyrealusername wrote: »

Yep, I think you're right. I was hoping that a small overdraft might lead to a small credit card with them to prepare my credit files for a future mortgage but I don't think I want to take the risk based on the info you've provided. Thanks very much

Theres still no harm in asking about pre approved limits in branch then at least it will satisfy your curiosity