Current account switching and credit ratings

yoinkster

Hi guys,

As I'm sure you can see, I'm new here so be gentle with my stupidity

I've got a couple of questions for you if I may:

1) Does opening multiple current accounts have any effect on one's credit rating? I don't know why but it sounds A Bad Thing (TM) to open say 3 current accounts in a month with 3 different banks and I'm wondering if it actually is recognised as a negative on a credit rating.

and
2) When using a bank's switching service, does your old Current Account get closed? I'm thinking of taking Santander up on their 3.1% interest offer on new Current Accounts but I'd quite like to keep my current Current Account open and I can't find any info on whether it would automagically get closed on my behalf when switching ...

TIA for your time,
yoinkster.

Gromitt

1) It shouldn't unless you request an overdraft, but depending on the lender, it can. (ie, Banks should only place a credit search marker on your report if you are applying for credit)

2) Only if you tell them to (they'll normally ask), and even then, most of the time they just give you a form to send to your bank.

rb10

Gromitt wrote: »

1) It shouldn't unless you request an overdraft, but depending on the lender, it can. (ie, Banks should only place a credit search marker on your report if you are applying for credit)

No ... all current accounts will show up on your credit report, regardless of whether you apply for an overdraft.

Whether it actually makes any difference when applying for further credit ... who knows? Banks don't publish their credit scoring systems.

However, unless you're looking to apply for credit (eg mortgage) in the next few months, I wouldn't expect it to make a difference. And even then, it may not have an impact.

Essentially - nothing to lose sleep over.

millipead

I have spent ages trying to figure out how to start a new thread. I have clicked on every button on the forum page... I thought there would be a 'new topic' button, but no. I have now given up.

Saints2011

millipead wrote: »

I have spent ages trying to figure out how to start a new thread. I have clicked on every button on the forum page... I thought there would be a 'new topic' button, but no. I have now given up.

On the left, but thank you for this useful post..

Gromitt

rb10 wrote: »

No ... all current accounts will show up on your credit report, regardless of whether you apply for an overdraft.

I was talking about searches from applying for a current account. Not every bank performs a full credit search for a current account if you don't apply for an overdraft. For example, I applied (and got approved) for a Santander current account last year, but other than a generic ID check, no credit search was performed via any CRA.

Secondly, I've had a Nationwide current account for the last 10 years now - it still doesn't show up on my credit report (on any of the CRAs). Strange thing is, I have actually gone overdrawn on this account on more than one occasion (but did credit the account within 7 days inside the same month).

yoinkster

Ok, so I'm with you so far I think. When opening a new Current Account, banks will do some sort of check to make sure you are a decent person - and some will do full checks, some will just check your ID.

But do both parts of this then get marked down on your history? Ie, "we checked him because he applied" and then also "we approved him"

I suppose there's nothing bad about having "wanted to open new account, got approved" on one's record 3 times in a month but not knowing anything about how CR work, I'm quite interested to know what gets recorded and how that info can then get used/abused.

I'm not intending on taking anything out on credit any time soon, but as far as I know I've never done anything wrong and my credit rating should be perfect. Hence my keen interest in how it all works.

But I see HSBC are offering a 6%er, think I'm going to have to give that one a go!

Thanks for your help so far And yes, I appreciate I'm getting myself bothered by something that's probably very irrelevant

MoneySaverLog

A standard current account could offer a unarranged overdraft so it may be seen as a credit product hence the search which will show up, as opposed to the anti M/L type searches these institutions do when you join them for say a savings account where you cannot go overdrawn.

Gromitt

yoinkster wrote: »

But do both parts of this then get marked down on your history? Ie, "we checked him because he applied" and then also "we approved him"

If the do a full credit check, that goes down on your report, but whether or not you got approved does not go on your report. If they only do an ID check, no one else will see that information.