Current account denial: the "no credit agreements" trap?

CaptainCutshaw

My wife and I just had an application for a joint current account turned down.

There are only two reasons I can think of:

1. One of us (likely me) has in the past forgotten to pay a utility bill, not passed on new address details to a utility or landlord, or generally forgotten to do something.

2. One of us (almost certainly me) has "no credit agreements" showing up on our file.

Aside from my student loan 8 years ago, I have never borrowed money. I have an HSBC current account (in credit -- and has been for about 6 years) with an associated credit card that I pay off in full each month.

I've sent off for my credit report from "checkmyfile.com". Assuming it shows problem 1, I guess I have to call up the individuals concerned and grovel. Frustrating but fair.

If it's reason 2, what can I do? If I can't even get a new current account because I have "no credit agreements", what can I do to get a credit agreement -- and thus improve my score?

By the way, it was one of those Halifax high-interest current accounts that we applied for.

Thanks for your advice and ideas.

PS I've been through all the credit-score related articles on the site, and explored checkmyfile.com thoroughly -- I used their free scoring estimator tool answering all the questions honestly, and also fiddling. The thing that worries me is that "no credit agreements" takes me straight down to the worst possible estimated credit score.

YorkshireBoy

CaptainCutshaw wrote:

There are only two reasons I can think of:

Don't try and "think" of reasons. Ask Halifax why you've been declined. Whilst it may simply be down to the fact that you have no credit history showing at the CRA's, their decision could also be based on a policy rule infringement.

...and explored checkmyfile.com thoroughly

Then you'll have seen this in their T&C's...

5. We provide credit reports on a simplified basis to make it easier to understand the contents. If you are using our services to check the accuracy of your own file, you acknowledge that a credit report from us is not the same as the file you would receive if you exercise your statutory rights to obtain a full copy of your credit file from any credit reference agency at any time upon payment of the statutory fee of £2. You agree that you will not use any of the information we provide to you including credit scores as the sole basis for any decision you may make.

Don't waste your time or money with checkmyfile. Spend £4 and order your statutory reports from Experian and Equifax

CaptainCutshaw

YorkshireBoy

Thank you for your help.

I talked to Halifax. They told me it was a credit rating problem. They couldn't tell me any more because "it's all through the agency and we don't have access to that information".

I chose to use CheckMyFile because in this situation I am prepared to pay for a report that is easy to understand.

I'd be grateful for any other ideas about moving towards a solution to this. The people who gave us joint cheques as a wedding present will start to chase us up before long, if nothing else!

Thanks

David

johnofhertford

The banks will never give you detailed information on why you failed to get a high enough score, partly because they don't want to let people learn how to maipulate the system and partly because it's a points system so it's not necessarily one thing that's counting against you.

I assume you're on the elctoral roll and haven't moved house recently?

No matter what you should be able to get a basic bank account, which will mean you can pay in cheques etc. You won't get high interest but if you organzie your finances so that you don't keep too much money in your c/a and switch it to a savings account then that shouldn't matter too much. They're not really interested in denying you a current account, they don't want to give you an overdraft - basic bank accounts don't come with overdrafts, so that won't be a problem.

For more info on basic bank accounts try this:

http://www.fsa.gov.uk/consumer/pdfs/bank_account.pdf#search=%22basic%20bank%20account%22

CaptainCutshaw

We did move house recently (when we got married) but got ourselves straight on the electoral role.

The overdraft doesn't seem to be an issue. The lady at Halifax said that withdrawing our request for an overdraft would make no difference because having a cheque book means this is a credit-based product.

Using the tool at https://www.checkmyfile.com/Score.asp and saying "I don't have any credit agreements" gives me a very low score (1-star). Even saying "several payments are in arrears" gives me a better score (2-stars).

What exactly constitutes a "credit agreement"? There are separate questions about having a cheque account and credit card, so I assume these don't count...?

PS I guess a basic account would solve some immediate problems but really we're a financially stable couple with no debts (that we know of!). Soon we'll be wanting to buy a house, start a family... and it won't be easy if we can't use common financial products.

anniecave

Having moved house recently is detrimental to a credit score, even if you have a good reason for it (like getting married!). You could try another provider?
Alternatively why not either covert your bank account or your wife's to a joint account, then try again in a few months, when your credit score will be better?

anniecave

By the way, did Halifax say which credit reference agency they use?

CaptainCutshaw

Experian... and there's a grid somewhere on this site that identifies Experian as Halifax's agency too.

Yes I think I'll try turning one of our existing accounts into a joint account. Thank you for that suggestion.

By the way, do we know each other? I recognize your name... is mine familiar?

anniecave

CaptainCutshaw wrote:

Experian... and there's a grid somewhere on this site that identifies Experian as Halifax's agency too.

By the way, do we know each other? Recognize your name...

Yep, hello, I recognised your alias! You can get a free credit report from Experian, by signing up to a free 30 day trial and cancelling before the end of the 30 days. Quite useful it is too.

https://www.creditexpert.co.uk/UK/index.aspx

interestingly enough I have a credit card with Halifax, but that wasn't listed on the Experian credit report. So I don't know how that works.

It is likely to be something as simple as they haven't got any records for you. If they don't, then they will ask you for address details so they will then have that information at least.

CaptainCutshaw

Small world.

YorkshireBoy

anniecave wrote:

interestingly enough I have a credit card with Halifax, but that wasn't listed on the Experian credit report. So I don't know how that works.

Have you had it a long time? As far as I'm aware, accounts opened before 1998 providing they are well run are very often not reported to the CRA's.

I've had my main current account for 27 years and, with my overdraft limit and credit card limit, I have well into 5 figures of available credit that isn't reported to the CRA's.