Applying for a Current Account and facing rejection!?

Carpi10

Hello all,

In regards to Credit Checks being conducted on me...

I currently have a £18,000 (£5400 deposit) car with £12,600 on 0% finance, paying £350 pcm. I have been paying this since Sep 2009 and have never missed a payment. I currently have approx £5000 left to pay. Surely this should look good on my report!?

I have no other loans, bring in over £1500 a month with a montly outgoing of around £400 (inc car payment) which brings my total income down to £1100 each month which all goes to an ISA, Reg Saver (Put money into my parents account with HSBC) and a Savings account with Halifax. I don't even use an overdraft...

Yet, when i apply for an HSBC Current Account, i am faced with rejection!?

Why am i a risk of having a current account where i want to put money in!?

I have applied for credit cards simply to try and raise my so called credit rating but am still faced with rejection. Although i was accepted with Vanquis with an interest rate of 40% but this does not affect me as i have already set up a direct debit to pay in full each month.

I seriously need help, I will be going to Afghanistan in Oct and will be returning in May 12 and looking to get myself on the market. I will have around £21,000 as a deposit, but getting anything else is going to be a handful i think!?

I am 21, work in HM Forces, never been in debt (other than a car on finance). Never been late on payments.

Suggestions!?

Thank you,

Chris

qpop

Complain to HSBC and insist that they look into it. Explain to the complaints department you speak to that the most likely reason you're being rejected by the automatic system is due to moving around a lot between barracks etc. (this may well be the case) and that you feel they're discriminating against you as an armed forces personnel.

If your credit file isn't full of defaults (remember these can be registered for up to six years so come clean if there are some historic issues) I can almost guarantee you will receive a bank account based on that information alone.

In all honesty, and I speak from inside experience in a banks mortgage underwriting department - if a real underwriter looks at you for a mortgage (which is likely) and sees the situation that you are painting here, they won't reject you based on credit scoring. The fact you're working for HM armed forces is a huge bonus as well, as banks are under intense political pressure to be seen to be lending to servicemen/women. Again, none of this information is heresay, it's based on (slightly out of date as I left the bank I worked for around 3 months ago) hard facts.

Hope that helps.

Carpi10

Thank you for this, its much appreciated. I will certainly be complaining in writing.

I don't want to be complaining evey time i apply for something. I still don't understand why my credit rating is poor? :mad:

qpop

I can't profess to know the intricate details of HSBCs automatic credit scoring system, only a select few people will know (There is a department in every bank called analytics, if you come across them be very friendly!)
But, broadly:
There is no such thing as a universal credit rating.
Certain generic points will be looked at. Such as electoral roll details, time at address, etc. - these will get a certain weighting (much lower than people seem to think!)
Then specifics are looked at, how "indebted" are you? i.e. what percentage of your possible borrowing do you have outstanding?
eg - £5k limit credit card has £3k outstanding - 60% indebtedness. These again have a certain weighting.
Other things that can cause trouble: Being financially "involved" with someone with poor credit. Living with them is NOT involved, but sharing banking facilities is. This will most likely "refer" the scoring to a real person.

So lets say, based on the above, a bank will give you a score out of 100

70+ will automatically approve, 80-100 will have the best terms (good rates for o/ds, or higher o/d, or whatever)
40-70 will refer (either the branch manager, or a centralised department will need a real person to look at it - this is common when you are "financially linked" to someone with credit issues)
below 40 will reject, but again, there will be different levels of rejection - so rejection might be based purely on credit file issues, or due to not enough data, or an address mismatch, and each of these rejection codes will be treated with different severity.

Like I say though every institution treats the generic data they collate differently, if you are interested the "industry standard" credit scoring system (that until recently Call Credit used to provide "credit scores") is FICO, or Fair Isaac Corporation scoring.
Google it, it's quite enlightening!

The pages on MSE about credit records are great too, and will outline the steps you should take to find out what the issue is and how to resolve it, but in this case I'd certainly recommed making a complaint. You don't need to write in, financial institutions are instructed to place the same importance on a complaint whether it is verbal or written, althouh you will definately get a quicker/more favourable response if you complain to the banks head office (by email, for example).

I hope that helps.

Carpi10

Thank you for that, appreciated.

I am not on the electrol list, but will this be affected if i am moving around all the time?

Also, what are defaults please?

Carpi10

Would this be ok for a letter, any edits or additional information required would be much appreciated. Thank you

Head Office
Complaints Department
First Direct
40 Wakefield Road
Leeds
LS98 1FD

12 August 2011

Dear Sir or Madam,

Application for a Current Account rejected

On the 12 August 2011, at approximately 1500 hrs, I applied for a Current Account with First Direct over the telephone. After 30 minutes on the telephone applying for the account, I was confronted with rejection due to failing a Credit Check. I was distraught and shocked by this outcome, which has led to this complaint.

I currently bank with Halifax, holding a Reward Account, Savings Account and an ISA Account but because there is no branch close to my home, I would have liked to transfer the account to a First Direct Account after being recommended for the Customer Service value.

I work as a Royal Air Force ............. in HM Forces, ............ and have been in post since ........... I currently earn £21,773 excluding Operational Allowances and Bonuses. This is due to go to £24,074 in June 2012 with an incremental pay rise of approximately £1200 per annum.

A few facts about my current financial situation:

Halifax Account Total: £6600

Income;
£1800 p.c.m gross
£1550 p.c.m net (this is after tax, NI, accommodation, food and all other general living charges)

Outgoings;
Car Loan: £350 p.c.m (£5250 still to pay on 0% finance) Total loan was £12600.
Direct Debits/Other: £50 p.c.m

Total income (after all deductions including direct debits): £1150

The total income is split down in to a Savings Account, a Regular Savings Account and an ISA Account.

I am currently on Pre-Deployment training waiting to go to Afghanistan in October 2011. During my time out there, I will be receiving an operational allowance which includes an extra £200 p.c.m on top of my current Income. Upon return from Afghanistan, I will also be receiving a lump sum bonus of £4800.

I feel that I am being discriminated against as I am in the Armed Forces. I also believe that due to moving around often within the UK and Out of the UK, that this is affecting my Credit Rating.

Surely, with the information I have provided, you cannot reject me for a simple Current Account where I would like to start saving for my future.

I look forward to hearing from you soon and appreciate your help in this matter.

Yours faithfully

chriscarpi09


Mr ................................

jen245

You are applying to First Direct, probably the most picky bank in the UK! They do not like debt, and so your car loan, while well managed, won't be doing you any favours with them. Try HSBC themselves, as they are not quite as strict.

Carpi10

First Direct are apart of HSBC? So surely there system is very similar if not the same?

meer53

It would be quicker to phone them to complain, they're a telephone bank,writing a letter will just delay any investigation as to why you've been declined.

jen245

Carpi10 wrote: »

First Direct are apart of HSBC? So surely there system is very similar if not the same?

They may be the same group, but they have different criteria. First Direct cherry pick their customers. I also think you are wasting your time appealing

qpop

jen245 wrote: »

They may be the same group, but they have different criteria. First Direct cherry pick their customers. I also think you are wasting your time appealing

jen245 I can almost guarantee that his account will be opened as a result of that letter.

carpi I recommend addressing it personally to the FD CEO (in transition currently but address it to Matt Colebrook).

People don't half talk a load of rubbish on internet forums..

FD are a picky bank that's true, but a well managed car loan is well within the bounds of acceptable expenditure; to decline a current account application on that basis is craziness.

I also happen to know that FD have a great credit services department, very thorough, so they will look into it properly if the complaint gets looked at (which it should)

For the record I haven't worked for FD.