The ever increasingly strange policies of Nationwide

vincen_2

I've been a Nationwide customer for about 10 years, always with a positive balance and it's my only bank account. I recently applied for one of their Flexi-mortgage on a 4 year fixed rate, free legals, free valuations and got accepted - i.e. passed the credit checks, got a DIP etc.

When it came to paying the booking fee, I got told that I had the wrong "type" of account and I had to upgrade. I asked to be upgraded but got told that I couldn't and therefore couldn't take that particular mortgage.

I asked for a full reason (all of this was with their Telephone banking) and then got passed around depts until someone told me that it was because I failed their "internal credit scoring system" - I explained that I had just passed a credit score for a 80% LTV value mortgage for 300K+ and that it was insane that I couldn't upgrade!!?

I asked for the decision to be appealed and will hear the outcome on Monday (even though I was told it would be 5pm today). Up until now I've always thought Nationwide were a decent Building Society but am considering switching unless I'm upgraded.

Anyone else had a similar problem?

innovate

what account do you have with them, and what have you been told you need to upgrade to? Have you been given any printed literature, or a website reference, that describes the pre-requisite for the mortgage?

vincen_2

I have a Flex account with a Visa Debit Card, (Cash card +) apparently I need the next account level up, from their website to qualify:

To get access to our range of Flexclusive offers you must either:

1. Hold a FlexAccount with a Visa debit card (not cash card or cash card+) and:
   • Have been paying in £750+ a month (excluding internal transfers) for the last 3 months; or
   • Complete an account transfer to us (from a non-Nationwide account)

My card says Cash card+ on it but for all intents as purposes is Visa Debit card (has the Visa logo).

I understand that I do not qualify on the basis of the account level, my real confusion comes from why they won't upgrade me. It's a "computer says no" type situation. They told me that if I upgrade then I qualify for the mortgage.

I pass the credit scoring system for a mortgage but cannot pass the credit scoring system for an upgraded account?? Seems a bit strange.

Caladan

Do you meet the £750/m mandated credits for the last 3 months? Do you run the account in credit/within an agreed limit?

Cash Card+ is an All-Authorised Visa debit card, these aren't fully functioning debit cards as they always check the balance before allowing a payment to go through. Full Debit cards don't and therefore carry a higher risk to the bank.

You are quite right that it's a bit strange to pass the scoring for the Mortgage (although all you've got is a DIP which isn't the same thing really - DIPs only run a very basic score). I have seen it happen though, I've had clients take out £500k Mortgages and have their bank account decline.

AndyPK

I bet they will accept you for the higher one that has a monthly fee with insurance.

Thrugelmir

vincen wrote: »

I've been a Nationwide customer for about 10 years, always with a positive balance and it's my only bank account. I recently applied for one of their Flexi-mortgage on a 4 year fixed rate, free legals, free valuations and got accepted - i.e. passed the credit checks, got a DIP etc.

When it came to paying the booking fee, I got told that I had the wrong "type" of account and I had to upgrade. I asked to be upgraded but got told that I couldn't and therefore couldn't take that particular mortgage.

When you say applied. Was that an enquiry or a full mortgage application?

pqrdef

Computer says no because you've got a cash card plus. This probably means that you've never given the current account people access to your credit report. The mortgage people obviously have it, but they're a different fiefdom.

In my case the first thing I had to do was phone and ask them to upgrade the card - not the account, just the card. They asked for credit search permission and did the search and okayed it straight away. They sent me a new blue card and also changed my sort code, though the old one still works.

Then I paid in £750 for 3 months, then applied for a Flexclusive. They said my account still wasn't flagged as a prime account, because I hadn't got a salary going in. There's no such rule, but they were trying to fob me off. I got round that by phoning credit card sales on their 0800 number and saying I wanted a Select card. They had no trouble deciding I could have my account flagged, though I still had to wait for the computer.

There's a plan B now though - apply for a FlexDirect. The application website will do the credit check. Having a FlexDirect qualifies you for the mortgage without having to upgrade the other account.

JuicyJesus

The thing a lot of people don't get is that mortgages and current accounts have entirely different credit profiles in the same way that credit cards and overdrafts do, or loans and credit cards, and aspects of one's history or simply one's demographic that might make you attractive for one product might make you less attractive for the other, and vice versa.

A mortgage is a long term secured debt where (barring fraud) the risk to the bank, commensurate with the LTV of the mortgage, is relatively low and there's a good amount of consistent profit involved. A current account can be used to guarantee lots of payments leaving an unsecured overdraft that might never be repaid, used to launder criminal proceeds through or even could be used for fraud which would leave the bank liable for further losses, and is a free product which earns the bank relatively little income, if not actually making a loss. That's not to say this is what's happening here, or that this is what a bank thinks of every time they decline someone, just that it's a little more complex than "lending lots of money" vs. "bank account".

That's not to say that all of these sorts of decisions make intuitive sense, or any sense at all; the credit scoring process is generally sound, but there are always outliers whose credit histories place them on the cusp of acceptability, and I think the OP is one of those outliers. Usually when there's no adverse credit or poor payment history an appeal to a manual underwriter (as the OP has done) will get things looked at, probably involving a manual look over one's credit history in relation to the bank's criteria. For a current account, I'd be surprised if that resulted in a decline unless there are some nasties on your credit file (I've had declines overturned before for the same reason - was quite easy, only downside is it meant I had an account with Halifax). But it all depends.

dalesrider

I bet if you ring back and complain as you have banked with them for 10 years as a good customer. I'm sure that the loss of a money spinning mortgage will soon over rule and get you what you want.

Have a look round and compare other fixed term offers. You might find something better.

grumbler

pqrdef wrote: »

....In my case the first thing I had to do was phone and ask them to upgrade the card - not the account, just the card.

IIRC, reportedly it is easier to get a new (second) account at NW than to upgrade the existing one.

simax

Caladan wrote: »

Cash Card+ is an All-Authorised Visa debit card, these aren't fully functioning debit cards as they always check the balance before allowing a payment to go through. Full Debit cards don't and therefore carry a higher risk to the bank.

Not quite true.

I saw a CashCard+ being used 37,000ft in the air on Monday night....