Refused First Direct based on Credit Check?

noah271007

Cos FD are known for their excellence in service and are regarded as the best bank account in UK. Therefore FD want to get the best customers.

premierfella

I was about to post a similar, but more long-winded reply. As it is already typed...
There may be little difference in terms of credit risk for the bank whether you apply for a credit limit (i.e. overdraft) or not. Both formal or informal overdrafts carry similar credit risks for the bank, they charge you more handsomely for the latter.

Whilst the credit risks have reduced slightly for them recently (they no longer issue new customers with cheque guarantee facilities on the debit card), as I understand it they only offer a "full" debit card (although I stand to be corrected) which means that it is possible for you to run up an informal overdraft via debit card use, hence the credit risk.

All that said, I agree that they are known to be more choosy than other banks in their customer selection, which is done by applying stricter credit scoring criteria. The reason is purely business - maybe they think they have a way of assessing via their credit score how profitable certain potential customers will or won't be and have rejected you based on that - that would still be covered by their credit scoring assessment.

karatedragon

zudecke wrote: »

Hi,

Can't Believe I have just been refused an account with FD after having been accepted by Halifax, based on an Experian C check.

Takes the piddle!

According to Check My File, my credit rating with Experian is the best of the 3 lol!



Can anyone tell me why this is happening to me? Are FD unusually strict in this case, or is this common?

Cheers,

Z

427/1000 seems pretty naff really. I wouldn't give you an account on that score. To only score that you must have fallen by the wayside at sometime or other.

On Equifax's own site my score was 475/500. Stupid really as I don't need or want credit and those that do can't get it.

I am wondering if I would get an account with FD. I am with Coventry BS and they are stricter than strict.

BASFORDLAD

zudecke wrote: »

but the point i was making is - I'm not applying for credit, so why is the criteria so strict??

Yes you are as thier accounts allow to go over drawn even if you no overdraft etc etc.

Plus when will people stop paying to use these marketing gimmicks!!, thier credit scores mean nothing!!!

People need to wake up and smell the coffee.

TheEffect

The trick with first direct is to apply for an account with £0 overdraft, and then ask for the overdraft in a few months.

I got the account when I just turned 19 (start of this year) and had a terrible credit rating (very high amount of searches/limited history).

karatedragon

Is FD really that necessary to you. Is it really that good?

I have never had any yearnings to want to go with them.

serena90

They wouldn't acccept our daughter for an account when she graduated and started earning, even though my husband and I have been good (well, I hope so!)customers of theirs almost since they started. We have our mortgage, savings, ISAs ,insurance, credit card etc etc with them, and we did hope that it might all stand her in good stead, but no...
Because she's only earning 14k while doing her postgrad and working part-time and she hasn't any credit history at all she 'doesn't fit our profile at this present time'. In the meantime, she's suffering from some very indifferent service at the hands of RBS . I hope she'll try for FD again when she's earning a bit more.

zudecke

BASFORDLAD wrote: »

Yes you are as thier accounts allow to go over drawn even if you no overdraft etc etc.

Plus when will people stop paying to use these marketing gimmicks!!, thier credit scores mean nothing!!!

People need to wake up and smell the coffee.

So what do they base their decision on, if not credit scores???

paulmcerlean

zudecke wrote: »

So what do they base their decision on, if not credit scores???

What he means is FD and other lenders do not use these random scores created by experian and exquifax and checkmyfile etc...

they use their own scoring criteria, something we do not get to know about!

experian etc... say their scores are indicators of your real score, but 8 times out of 10 they are very very incorrect.

motoko

I think First Direct are particularly strict. I was also refused and I've never been refused a current account before, I always thought you only got refused if you weren't on the electoral register. I rang up to tell them I didn't need an overdraft and they said it didn't make any difference. It seems a little bizarre to use their lending criteria to rule me out even though they aren't going to lend me any money. OK, I know they can authorise payments that take you into the red even if you don't have an overdraft, but that's their decision on each occasion, they can always deny payment instead if they prefer.

I think they are just trying to restrict the account to people who they think will have a high throughput and/or keep a lot of money in there, as it makes them more money, and they use the "we're a responsible lender" line as an excuse to weed out customers they don't want. Probably the right decision in my case, as if they'd given me the account, I'd have made more money from them than they would have from me. I thought £200 to open an account then close it 6 months later must be too good to be true. The incentive they offer is the only advantage of this account anyway, unless you happen to have a mortgage with them and use it as an offset account, the interest rate on the OD is high (after the first £250) and there's no credit interest.

BTW having a low credit score doesn't necessarily mean you've had credit problems in the past. It can also be due to moving house, changing jobs or even switching your main current account, or just because you haven't used credit much in the past. I've moved house & job twice in the last three years, and it makes a huge difference when applying for credit (or even current accounts apparently).