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Opening Savings Accounts with a poor credit history

Help! For the last 6 months we have completely struggled to pay bills and have been in a situation of paying the credit card bill late. In addition, my bank account was taken under the wing of the bank credit recovery team for 4 months to ensure it was running ok again. As another nail in the coffin, we were 3 months behind on the mortgage payments. We are fairly confident our credit rating has gone from perfect to poor in 6 months. I have been advised in the last month that my bank accounts are running fine again and they have been returned to branch. This week I cleared all overdue with both the credit card and brought the mortgage fully up to date. I have over £150K I need to invest by opening some high interest accounts (quite a few!), but I am worried I won't be able to open accounts due to my recent poor credit history. Since it is saving accounts I am needing to open, so I am depositing not borrowing, will I still face issues of credit checks and likely refusal? Also any advice on what I should do if that is the case. I can't leave such a high value to 0.5% rates.

Replies

  • FrugalsodFrugalsod Forumite
    3K Posts
    You should break it up to protect it against the risk of a bank insolvency and seizure as in Cyprus. I would not have thought that you would have problems though could you clear any outstanding debts as they will cost more than any potential income from any savings account.
    It's really easy to default to cynicism these days, since you are almost always certain to be right.
  • There are no debts now and I will break up the investments. The key question is will I have difficulty opening savings accounts/ISA's etc with 6 months of poor credit history?
  • bengal-stripebengal-stripe Forumite
    3.3K Posts
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    Forumite
    You will be checked for identification purposes but not for credit-worthiness.

    Be aware, that the proposed 150k you want to deposit (even if you split the money into deposits with two or more banks) will carry a great deal of questions about the origin and the legitimate source of the funds. Banks are obliged through 'money laundering' and 'proceeds of crime' legislation to establish the facts.

    With a deposit of that size, the banks will want to see a lot of documentation.
  • izoolsizools Forumite
    7.5K Posts
    OP, do you own your home outright?
    Cashback Earned ¦ Nectar Points £68 ¦ Natoinwide Select £62 ¦ Aqua Reward £100 ¦ Amex Platinum £48
  • Documentation is not an issue. Its legit funding and already in a high street bank with all documentation in place. No I still have mortgage and am not planning to clear what is left until 3 years down the line (yes I know the advice) but we have a specific reason not to tie up a large proportion of the funds by paying off remaining mortgage until the redemption figure is a lot lower (in 3 years).

    So, specifically, the reason for the thread, I shouldn't have issues opening ISA's or savings accounts with a poor credit history over the last 6 months because these are savings accounts and not accounts which (usually) have some facility to borrow (which we don't want) like a normal current account? So they don't credit check you on savings accounts, like they do on current accounts and loans? Thanks for all advice.
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