Opening a student account with bad credit

Ruthie_J

Hi everyone, apologies if anyone has posted this before, but I couldn't find anything.

I am going to be a full time mature student from September, and I have an unconditional offer I have a current account with Barclays, with an overdraft, and a loan from them which I have never missed a payment for. I went into a branch today and asked to open a student account. I was advised to open a separate account, alongside my current one, as some of my overdraft is outstanding. After a few minutes of putting things into the computer, the advisor asked if I had missed any loan repayments, which I haven't. I told him I'd had rubbish financial habits up to about 5 years ago, where I missed several payments with another company, which has now been fully repaid. I have had a couple of card payments returned in the last year.
He went off to discuss things with his colleagues, and returned to inform me that I couldn't open a student account due to my poor credit rating, and I was very unlikely to get one anywhere else. He remarked that this was very strange, and he'd never seen it before. I politely replied that it was weird, as my credit's good enough to have a loan and an overdraft with them.

Now, I understand that they have the right to refuse me an account, and that I should have ran my finances much better, but I was under the impression (from other students) that banks are keen to snap up students so they can sell them graduate products later on.

Has anyone else been refused a student account? Who would you recommend I try? Obviously I don't want to make multiple applications and make my credit score even worse. Or should I not bother with a student account?

Thanks.

JacksterD

Ruthie_J wrote: »

and I was very unlikely to get one anywhere else.

You should have told him to keep his thoughts to himself! Have you checked your credit files at Experian and Equifax? It's possible Barclays have you down as a bad risk because of some of what you mentioned, but not all of this stuff will be reported to credit ratings agencies - they just know about it because they augment what they get from CRAs with data about you from their own systems.

If you see yourself ever needing access to an overdraft then apply for a student account elsewhere, as if you're accepted you'll get a nice big interest free one. I think in your case it would be worth giving at least one alternative bank a shot before giving up.

Fluff15

My friend has the worst credit rating and was still able to open a student account with Barclays (missed phone bills, always going over her overdraft etc). When opening the account, it's all done automatically and it's the computer that gives you the yay or nay there and then. I think it's a bit fishy he went and spoke to somebody else out of your earshot about it, did he say/show you the computer saying you couldn't get one?

I would try your luck elsewhere anyway, I've had a few friends who had Barclays student accounts and they were terrible.

Ruthie_J

Thanks guys. I have just been turned down by the Co Op too, they said it was based on my information with Experian. I have just checked my report, and it's all fine, except an account I defaulted on back in 2008, which I settled in 2010, so it flags up as default but satisfied.
I also don't know anyone who's ever been turned down for a student account, and I know my finances aren't great, but I didn't realise how unappealing I am.
I guess I'll just focus on my debt free date of September next year, and manage without a student account until then.

Mummy_Moo

Sounds like Barclays are being a bit iffy. Generally you can just change your current account to a student account, but student accounts tend to have free overdrafts, so Barclays would loose money by giving you a free overdraft when you are already paying for one. If possible try paying off your overdraft (even if it is only temporarily) and speaking to Barclays again when you are in credit.

kangaree

If you are still linked to your ex partner financially this will effect your credit rating, I have found this out the hard way, I became in financial difficulties when i split from my partner and he stopped paying everything he owed because we have lived together we were linked. if you get in touch with experian you can request that the link be removed,hope this helps.

Experian_company_representative

Defaults stay on your credit report for six years, so this one should disappear next year sometime. As it's satisfied you should find some lenders happy to do business with you before it goes, but maybe not this one.

James

GoldenShadow

Being a student isn't cheap and I know an awful lot of us with dire financial situations. Perhaps you are just high risk because you have already had credit issues. I'd say 80% students I know have maxed out OD's/credit cards/bank of Mum and Dad and a surprising amount of them have missed payments on credit cards/bills too.

Why did you want a student account, for the interest free OD?

Cycrow

Ruthie_J wrote: »

I also don't know anyone who's ever been turned down for a student account, and I know my finances aren't great, but I didn't realise how unappealing I am.

its most likly the default.
most students wont have any defaults when applying, as most will only be 18/19 so no time to actually get defaults on accounts