Any ideas why I have been declined a Natwest overdraft? (Now accepted!)

notmyrealusername

Firstly, the background...

Joined Natwest 2006 (no debts with them)
IVA taken out late 2006
IVA completed via F&F 2009
IVA removed from credit file along with any defaults Sept 2012

There are now no negative issues on my credit file. Positive issues are:

Three credit cards, all with approx 2k limits. Spend approx £300 on each one every month and the bills are paid off in full as soon as they arrive - have had credit cards since 2010 and 2011. Mobile phone, broadband and Argos card all reporting as OK. I do have positive history going back as far as the IVA as I was allowed to continue paying my car loan . There are no credit searches whatsoever.

I have never gone even a penny overdrawn in the whole time I've been with Natwest, I earn around 30k per year and have lived in my current property since 2008 and am on the electoral roll. I decided to test the water with them and apply for an overdraft, I selected the desired amount as £500 but have been declined

I fully appreciate that Natwest can and do chose who they lend to, I don't need the credit facility and was only really applying to see what difference the IVA and defaults being removed from my credit file made, and also because I intend to apply for a mortgage in a few years time so wanted to have a credit facility with my own bank to help with a mortgage applicatiopn. Bearing in mind financial institutions who I had no financial connections with have given me credit facilities with the IVA and defaults still showing on my file I'm just confused as to why Natwest would decline a current customer with what is essentially a 'clean' file.

Not sure if it's relevant but when I first opened the account (pre-IVA) they tried to give me a £500 overdraft which I declined as I didn't want credit facilities on my account as I had opened the account in preparartion for applying for the IVA.

Any ideas?

Updated post #29 http://forums.moneysavingexpert.com/showpost.php?p=57333353&postcount=29

PhenoM

You might have tried too soon.

Natwest might still be using the old data. I'd suggest you try again in 2-3 months.

pinkdalek

3 x credit cards with a combined total of £6000 and an Argos card which you did not say how much credit was on there.

May be declined due to you having access to at least £6000 credit? Do you really need 3 x credit cards?

A mortgage is one of the most secure forms of credit a bank/building society can lend to. Having an overdraft with your bank would not make much difference if you went to them for a mortgage as they would check your existing credit file anyway.

notmyrealusername

PhenoM wrote: »

You might have tried too soon.

Natwest might still be using the old data. I'd suggest you try again in 2-3 months.

Thanks, any ideas where they would have got the 'old' data from though? I have checked Experian, Equifax and CallCredit and none of them have ever been searched by Natwest in the past so how would Natwest know about the previous adverse credit?

As at today (5 mins before the application!) all three CRA's were showing a nice healthy report.

notmyrealusername

pinkdalek wrote: »

3 x credit cards with a combined total of £6000 and an Argos card which you did not say how much credit was on there.

May be declined due to you having access to at least £6000 credit? Do you really need 3 x credit cards?

A mortgage is one of the most secure forms of credit a bank/building society can lend to. Having an overdraft with your bank would not make much difference if you went to them for a mortgage as they would check your existing credit file anyway.

Thanks, I have 6.5k available over three credit cards and the Argos card has a limit of 2.4k - so around 9k in total available credit on a 30k income. There's around £400 on the Argos card (on a 0% buy now pay later deal) and the credit cards have a revolving balance of around £300 each which is paid off in full every time without fail so at any one point I could have around £1200 of used credit.

I don't need three credit cards, the difficulties I got into pre-IVA have taught me a major lesson and I will NEVER 'owe' money again aside from a future mortgage. I only ever put anything on the credit card when I already have the money in my current account to pay for it and as above I always pay the bill off in full immediately. I am keeping the cards open to get the green dots on my credit report each month in preparation for the future mortgage.

One of the cards is Vanquis so would obviously never use that as a 'real' credit card, only as a credit rating improvement exercise. I'm reluctant to cancel that one though as I've had it for the longest so it shows the financial stability in terms of longevity of the account.

AppleMatt

notmyrealusername wrote: »

Thanks, any ideas where they would have got the 'old' data from though? I have checked Experian, Equifax and CallCredit and none of them have ever been searched by Natwest in the past so how would Natwest know about the previous adverse credit?

As at today (5 mins before the application!) all three CRA's were showing a nice healthy report.

Banks "subscribe" to automatic updates of your credit reports, which are updated every month, or every 2, or whenever the bank has chosen to automatically update them.

They don't initiate new searches on your file if you are an existing company, and they already have a recent selection of your reports.

I'd maybe get rid of one of your cards (Vanquis) as it could well be something to do with your existing available credit. 9K on 30K per annum may not seem outrageous, but lenders have tightened their criteria as of late. 6K and waiting 2-3 months may just make things better

FWIW Natwest also turned me down for an overdraft, no idea why either. Fine reports, no charges ever, monthly (decent) salary and savings with them. But not even allowed £100 :mad::p

stclair

If the bank was aware of your IVA you may have a Z marker on your account which will give you an instant decline without you even being credit scored.

You could pop into a branch ask them to appeal for you taking copies of your experian and equifax credit reports.

notmyrealusername

stclair wrote: »

If the bank was aware of your IVA you may have a Z marker on your account which will give you an instant decline without you even being credit scored.

You could pop into a branch ask them to appeal for you taking copies of your experian and equifax credit reports.

Thanks, as far as I'm aware Natwest would not be aware of the IVA as I have never applied for any form of credit with them after the IVA was entered into. When I opened the account (on the advice of PayPlan as Natwest was a bank I had no debts with and was about to enter an IVA) they offered me a £500 overdraft which I declined.

The IVA marker was removed as soon as the full and final settlement went through so as from 2009 the adverse data was the defaults.

I don't need an overdraft so probably won't faff about asking to appeal, was just surprised to be declined based on my new clean credit reports.

AppleMatt wrote: »

Banks "subscribe" to automatic updates of your credit reports, which are updated every month, or every 2, or whenever the bank has chosen to automatically update them.

They don't initiate new searches on your file if you are an existing company, and they already have a recent selection of your reports.

I'd maybe get rid of one of your cards (Vanquis) as it could well be something to do with your existing available credit. 9K on 30K per annum may not seem outrageous, but lenders have tightened their criteria as of late. 6K and waiting 2-3 months may just make things better

FWIW Natwest also turned me down for an overdraft, no idea why either. Fine reports, no charges ever, monthly (decent) salary and savings with them. But not even allowed £100 :mad::p

I hope this isn't the case as I purposely avoided applying for anything with Natwest until all defaults had gone in the hope that they would never know about them due to the six year rule!

I was thinking it would make more sense to keep the Vanquis (as I am confident I will never use it in the true sense of a credit card) due to that being my longest credit account post-IVA. The other two cards are both from the same financial institution (Sygma Silver and Creation).

Experian_company_representative

If you were a customer of the bank during your IVA and had a credit facility with them (overdraft), even if you didn't use it, they are likely to have been aware of the insolvency and noted this on their own records. Lenders can use internal data in their credit scoring, alongside current CRA data. Have you asked them to explain their decision?

James Jones

jen245

It doesnt matter whether or not you applied for anything with them when you were in the IVA. Natwest would have been aware of the IVA, as they get a monthly feed from the CRAs, and as St Clair pointed out, you more than likely have some kind no lending marker on your account as a result.
I seriously doubt its anything to do with the amount of credit you have available. I earn quite a bit less than you, have 3 credit cards each with limits of around £4k (one with Natwest) paid off each month, and Natwest are quite happy to give me a 4k overdraft, although I only have £500, as I dont need a 4k overdraft.

notmyrealusername

Experian_company_representative wrote: »

If you were a customer of the bank during your IVA and had a credit facility with them (overdraft), even if you didn't use it, they are likely to have been aware of the insolvency and noted this on their own records. Lenders can use internal data in their credit scoring, alongside current CRA data. Have you asked them to explain their decision?

James Jones

Thanks, I have never had an overdraft on the account at all as I declined it before it was set up. I haven't asked them to explain the decision as I imagine they'll say 'due to credit scoring', 'you should check your reports' etc The reports are all clear so it's either old data or they somehow are aware of the previous IVA and have marked my account accordingly.

jen245 wrote: »

It doesnt matter whether or not you applied for anything with them when you were in the IVA. Natwest would have been aware of the IVA, as they get a monthly feed from the CRAs, and as St Clair pointed out, you more than likely have some kind no lending marker on your account as a result.
I seriously doubt its anything to do with the amount of credit you have available. I earn quite a bit less than you, have 3 credit cards each with limits of around £4k (one with Natwest) paid off each month, and Natwest are quite happy to give me a 4k overdraft, although I only have £500, as I dont need a 4k overdraft.

Thanks, I didn't think Natwest knew about the IVA as I had read that they had closed accounts in the past when IVA's were discovered and luckily had no such issues with them. If Natwest get a monthly feed I wonder why there has never been a Natwest search on my credit report though?