bank accounts and credit ratings

ehyouwhat

Hi all,

My belief has always been that I had a relatively poor credit rating, on account of getting myself into trouble a number of years back. I managed to clear all my debts about six years ago, and have stayed away from all forms of credit since then. I have however retained a basic bank account (Halifax Easycash Visa Electron) and have paid various direct debits from that account every month (mostly extended warranty payments for electrical items). I have also kept the account in good order with no missed payments.

Last month Halifax called me and asked if I wanted to upgrade to a full current account. I went in for a meeting and told them that I didn't think I had the credit rating to get a current account, and that I thought I might only get the account if I was scored internally. I was told that the had to do external scoring as that's how it now worked.

Anyway I bit the bullet and went for the current account and it was accepted straight away (not referred) which the assistant suggested indicated my credit rating might be better than I thought.

Is this the case? If my rating is on the mend I would consider going for a contract mobile phone as that would save me money. However, I don't want to ruin any chance I have in the future by suddenly applying for things that I am years away from being eligible for.

Any thoughts most welcome.

MoneySaverLog

ehyouwhat wrote: »

I managed to clear all my debts about six years ago,

If that's true then all the bad debt may well have been removed by now. I'd suggest getting hold of your credit file from Experian, Equifax and Call Credit, it will cost you £2 per report but worth seeing what's lurking around.

Having said that if Halifax have accepted you then it must be looking good I would have thought. Worth checking though.

ehyouwhat

Don't get me wrong, I was in terrible debt and accumulated a fair number of CCJs and defaults. I did clear them off as and when I could though, and even had a large payment deducted directly from my pay every month for two years. The last CCJ I had was is 2005 or 2006.

I was just surprised that I got accepted for the current account (Halifax Ultimate Reward) as the man at the bank suggested it would probably be declined if my credit was bad. I am not on the voting register, but I am a jointly-named person on our household bills and council tax bill.

Is getting the credit reports an easy and quick process, and does it count against me in any way?

Thanks again.

MoneySaverLog

Because the slate is wiped clean after 6 years

Getting your own credit report will not count against you in anyway. Sending £2 to each of the credit reference agencies is one way or you can apply online for the free trials which you should cancel after the 30 days or they charge you.

Getting on the electoral roll will improve your credit profile, I'm loathed to say score cause whatever score these agencies give you is meaningless cause they don't give credit and each lender will "score" differently.

You'll hopefully find the defaults and ccj's from 2005 gone, and any up till June 2006 also. I suspect you'd be accepted for a contract mobile phone now :-)

cottager

ehyouwhat wrote: »

I was just surprised that I got accepted for the current account (Halifax Ultimate Reward) as the man at the bank suggested it would probably be declined if my credit was bad.

Errrm... just sidetracking, do you need the Ultimate Reward a/c, or would a standard current a/c meet your needs? They did, I hope, explain that you pay a monthly fee for the Ultimate Reward? -- £10 pm if you pay £1000 into the account every month, or £15 pm if you don't. If you will use and gain value from the benefits to at least the value of the monthly fees you will pay then it will be worth it to you, but otherwise maybe not?

There are three Halifax current accounts available: inbetween the standard and the Ultimate Reward is the Reward. Neither the standard nor the Reward have monthly fees as the Ultimate Reward does (but equally they don't have the benefits of the UR either).

There's a straightforward comparison here:
http://www.halifax.co.uk/bankaccounts/current-accounts/

ehyouwhat

MSL - many thanks, I hope that you are right. I can but try. I guess it boils down to whether the assistant at the bank was telling the truth; if my application was processed through external credit scoring then it seems my credit history may be better than I had thought. If he lied and I was in fact internally scored (ie pre approved based on my conduct) then there could still be some time to wait.

cottager - Yes they explained the fees and the benefits, and actually I was accepted for all of the accounts and simply chose the Ultimate Reward. I pay in more than £1k a month so I pay £10 per month, and that fee is around the same as my phone insurance on its own. The holiday insurance and breakdown cover are useful too, so for me the value was there. Many thanks for the heads up though.

Simon7685

This strikes me as quite enterprising of Halifax, or should I say sneaky. They invite a basic bank account holder to upgrade.

They already have knowledge of his banking history with them, so know what his spending habits are. At the same time they know fine well the majority of people with the Easycash account want to get the full account and will just be delighted to be getting it.

So they reel people in syaing congratulations your good running of your accounts with us has helped improve your credit standing, here is your new current account....... Oh and by the way it costs you at least £120 a year for the privelage.

Basically to have the same facilities you had before, except the chequebook, which whilst usefull isn't really used in this day and age.......

Now don't get me wrong, I was one of those people, except I applied online after a largely humiliating in branch experience. I went in one day and got the, we'd like to upgrade you speech, I said I don't think you will I have had problems in the past. they said oh we can see how you run your account now and that's what matters. So I said ok, to then get turned down on the credit check in front of them. So next time I applied online and got the normal current account. Things are much better for me now credit wise but that day was not funny!

Bottom line for the OP, he gets upgraded to have the same facilities that he had and pays £120 a year for the privelage. Even the free OD is still subject to status and if you get it, don't use it, what do you gain? I pay £0 per year for the same account and have a £200 OD facilility as a safeguard.

They are raking it in with this ultimate reward account!

MoneySaverLog

But OP could have just took the reward current account, the OP has mentioned that he's better off with the Ultimate Reward Account.

Sneaky or not Halifax is a bank and they are in business to make money, if they can sell a value added account and the customer wants this then why not? I'd have a problem if it was sold with no benefit to the OP though this does not appear to be the case.

Also Halifax will know what data is on your external credit report cause it forms part of your customer profile which is updated monthly. The same system is used by Lloyds TSB, though the two banks have independent profiles if you bank with the two of them.

Old data at the CRAs do get wiped after 6 years.

ehyouwhat

en Halifax didn't give any indication that they knew my credit rating would allow an account upgrade - indeed, the advisor was very clear about the fact that I could be turned down once I was credit scored. He seemed surprised in fact that I mentioned my previously poor financial record; I'm guessing all he knew was that I was putting a decent sum through the basic account each month and had run the account well.

I don't have a chequebook on the new account, and I declined the offer of an overdraft as I feel I do not need it. But one benefit to me is that the Visa Debit card can be used in filling station self-service machines, whereas the old Electron card cannot. I also see value in the mobile phone insurance and breakdown cover. The advisor suggested I could shift my account to a Reward account at a later stage, which would remove the added value benefits and would also give me £5 per month instead of me paying £10 per month.

It is most definitely true that I was very pleased to have been offered the full current account, as it is something that I couldn't have imagined having a few years ago. I am also happy that I seem to have been qualified for this account by an external credit score rather than simply bumped up internally, as that hopefully means that I have well and truly turned a corner from my past.

pqrdef

ehyouwhat wrote: »

Halifax didn't give any indication that they knew my credit rating would allow an account upgrade

Like most banks, they're financial predators and they monitor your affairs continually on the lookout for a selling opportunity. But they aren't going to tell you that.

ehyouwhat wrote: »

indeed, the advisor was very clear about the fact that I could be turned down once I was credit scored.

They wouldn't have phoned without a reason. But things can change. You could have notched up another default since the phone call.

ehyouwhat wrote: »

But one benefit to me is that the Visa Debit card can be used in filling station self-service machines, whereas the old Electron card cannot.

You get that with the plain Reward account, it's not an added-value benefit.

ehyouwhat wrote: »

The advisor suggested I could shift my account to a Reward account at a later stage, which would remove the added value benefits and would also give me £5 per month instead of me paying £10 per month.

You get the £5 a month with the URCA too, so long as you pay £1000 through.

rb10

pqrdef wrote: »

You get the £5 a month with the URCA too, so long as you pay £1000 through.

No - the URCA gives you a £5 discount off the monthly fee if you credit it with at least £1000 - i.e. you pay £10/month instead of the full price £15/month.

It is only the Reward account that gives you £5 'cash' each month.