Refused Overdraft With RBS, Perfect Credit Rating

Crea

I take your point.

I'm less concerned that they refused (as I said, the overdraft isn't particularly needed, more of a contingency), and more interested in their reasoning. If they simply said 'we simply don't want to grant new overdrafts to customers who've shown no need of one', I'd actually accept that. It was the implication that there was a credit status reason behind the refusal that has piqued my irritation. If so, what? There is literally nothing negative in my financial history that I am aware of!

I certainly don't feel ENTITLED to an overdraft as such - as you say, the bank is well within its rights to refuse. I merely want to know why, particularly if the reason pertains to me specifically, rather than general market conditions.

Crea

YorkshireBoy wrote: »

If this is your only current account, and/or you've held it a long time, then doing so could negatively affect your credit rating. This is because lenders like stability, and 'time with bank' is almost always a question on credit application forms.

Suggest you leave the old account open and ticking over until you've assembled some history with the new provider.

Thanks, that's good advice.

steve1980

Crea wrote: »

I've always steered clear of debt, never had a credit card, and the only debt I've got is a joint mortgage.

This is probably why you have been declined.

You have no credit history, RBS want people with a history.

Crea

Just applied online for a credit card, which I needed anyway (for work travel pre-reimbursement). Immediately accepted, 7.5k credit limit.

Pretty clear what kind of debt they want you to have, isn't it.

knightfox

Crea wrote: »

Just applied online for a credit card, which I needed anyway (for work travel pre-reimbursement). Immediately accepted, 7.5k credit limit.

Pretty clear what kind of debt they want you to have, isn't it.

As someone said about another bank. What the banks give in credit eg loan or overdraft depends on how much money they have to give out on a particular time.

The credit cards are a different department and set up through different companies so have their own credit facilities.

It might also be that your branch is getting quite a few accoutns being moved from Engalnd & therefore hit their montly limits.

Also as said before, keep the account open. Its better for you in the long run.

Fiddlestick

Crea wrote: »

Just applied online for a credit card, which I needed anyway (for work travel pre-reimbursement). Immediately accepted, 7.5k credit limit.

Pretty clear what kind of debt they want you to have, isn't it.

I suspect that rather than you having uncovered evidence of some evil nasty conspiracy, the reality is that both products are likely scored in different ways.

You may well have met the score for the credit card yet not met the score for the overdraft.

YorkshireBoy

Credit cards have a monthly servicing requirement, ie 2.25% of the balance. They also make the company money, in the form of 1% or whatever of your purchase transactions and 2.9% of any amount transferred to the account.

Overdrafts only make them debit interest...pennies per month if you dip in and out quickly and rarely. However, the £100 you want is £100 they can't lend more profitably elsewhere.

That said, I'm still surprised that, with a "good salary coming into the account", they won't extend you a £100 facility. But that's the dark art of credit scoring for you!

jon_boy75

electoral roll is key, they may have only checked the one CRA for that...if you're not on it, often it's an auto-decline

but like all internal credit scoring, it's just guesswork for us

JohalaReewi

RBS seem to be rejecting a lot of their own customers lately going by the threads on MSE. I think maybe there is a big bad computer at HQ which says yes or no based on some 'standard checks' regardless of the actual history you have with the bank.

Twister84

The "big bad" is not actually at HQ

There is an internal pre-scoring screen used when applying for a credit-scored products, such as an overdraft or a loan. This gives staff a very good indication of whether it would be accepted or declined and usually saves the customer from getting a credit search done unnecessarily.

I would say, in future, ring up your branch and ask them whether you are eligible for an overdraft. They can usually tell you there and then whether an application would go through or not, and if it's a small amount, can normally tell you the maximum you'd be eligible for.