Refused HSBC account

flergalwit

Recently I tried to open an HSBC current account, in order to get their regular saver. They sent me a letter saying that after careful consideration they were unable to offer me banking services at present.

I was a little amazed. I've never had this kind of problem before. I have a decent salary, no debts, a very good credit report. I've never been bankrupt. Etc etc etc.

The only possible things I can think of are

(1) having a lot of current accounts already, including one with First Direct (which is a branch of HSBC), recently opened also with a view to getting their regular saver. The others I have are Natwest, Lloyds, Halifax and Nationwide. Could that somehow count against me?

(2) having recently cancelled two old credit cards that I wasn't using.

What should I do? I could live without the current account and regular saver but I find the fact I was refused rather worrying. Should I go into a branch with the letter and ask them (politely) what the heck is going on? I know they are not obliged to give me a current account if they don't want to, but I'm really unable to understand this decision.

Thanks!

MoneySaverLog

What available credit do you have with the banks you have at the moment compared to what your income is as a percentage.

I'm guessing it's over 50% Also did you ask for credit facilities at HSBC/First Direct on both your accounts, how are you managing your first direct accounts may also be taken into consideration. They would have credit scored you too, which does not necessarily take into account just what's on your credit file.

flergalwit

Thanks. I have £7700 credit available from credit cards (£6700+£1000) and £5650 from overdrafts, which I barely use (£1900+£1500+£1000+£750+£500). So that makes £13350 in total, which is under half my salary, which is a little over £30k.

Maybe it's possible they have not registered my recent cancellation of two credit cards, a bit over a week ago? They had limits of £2300 and £500, which would take my credit available to over 50% of my salary.

What should I do now? Just leave it? Or go into a branch and ask them?

BugsyBrowne

Are you allowed to be with HSBC & first direct(HSBC) together.

Can't see what available credit has anything to do with opening a bank account.

flergalwit

BugsyBrowne wrote: »

Are you allowed to be with HSBC & first direct(HSBC) together.

I've not read anything that suggests the answer is no. Anyone have an account with both?

BugsyBrowne wrote: »

Can't see what available credit has anything to do with opening a bank account.

It would be relevant if the new bank account was to come with an overdraft. There was nothing in my HSBC application about an overdraft, though every other current account I've opened has given me one without my asking, and maybe it's their policy not to open current accounts unless they can offer an overdraft?

Oh and as for how I've been handling my First Direct account, I haven't done anything with it yet as it was only opened very recently. The balance is still precisely zero.

MoneySaverLog

BugsyBrowne wrote: »

Are you allowed to be with HSBC & first direct(HSBC) together.

Yes, I have both.

BugsyBrowne wrote: »

Can't see what available credit has anything to do with opening a bank account.

Some time ago, their criteria was 50% and part of their internal scoring process, don't ask me how I know this I just do. Things may have changed since then however.

BugsyBrowne

MoneySaverLog wrote: »

Yes, I have both.



Some time ago, their criteria was 50% and part of their internal scoring process, don't ask me how I know this I just do. Things may have changed since then however.

I take it you have their 1st account as a savings account would rule this out. Unless you have to have a 1st account to get a savings account, not sure.

MoneySaverLog

I have the First Account with First Direct, a savings account with £1 in it, and their regular saver.

I also have a HSBC current account, where I pay £550 a month into it to feed £250 a month to the regular saver with HSBC and transfer £300 a month into the First Account with first direct and they then do a Standing Order for £300 from my First Account to the FD regular saver.

Sweet.

flergalwit

MoneySaverLog wrote: »

Yes, I have both.



Some time ago, their criteria was 50% and part of their internal scoring process, don't ask me how I know this I just do. Things may have changed since then however.

This then seems the most likely explanation in my case. Presumably even though my old credit cards (both Natwest) are cancelled, they don't know this yet, so think my available credit is above 50% of my salary.

I do wish they'd made this kind of criterion clear to people before opening. I really don't like having an HSBC search on my credit file with no HSBC account. It looks kinda bad.

MoneySaverLog

Highly likely it takes time for them to update the credit reference agencies. I'd suggest closing down any lines of credit you don't need then trying again in 6 months.

Internal scoring processes are highly guarded secrets in the banks, as publishing them leaves them open to abuse.

GlamGirlie

You could go into the branch but the staff won't be able to shed any light.

As MoneySaverLog states above, internal credit scoring is highly confidential. If staff knew exactly what made up the credit scoring, they could potentially manipulate it, or tell clients how to.