Natwest declined REDUCTION to overdraft...

guesswho2000

stclair wrote: »

NatWest will credit search you to reduce your overdraft this is clearly detailed in the T&Cs you arranged to when making the change.

As effectively they are taking the old one away and giving you a new one.

Plus as you application was declined the bank now may think you are no longer eligible for an overdraft.

Is this new? I ask because NatWest (or RBS) never even searched me to give me an overdraft. I haven't looked in a long time, but when you went part way through the application, it used to give you a recommended figure, which was basically (although they always said it was subject to status) what they'd give you.

stclair

guesswho2000 wrote: »

Is this new? I ask because NatWest (or RBS) never even searched me to give me an overdraft. I haven't looked in a long time, but when you went part way through the application, it used to give you a recommended figure, which was basically (although they always said it was subject to status) what they'd give you.

No they have done for a very long time now.

Their are plenty of threads within MSE regarding the matter.

If its done by lending they can over ride the decision and just reduce the overdraft without the credit search. If its done online its all systematic.

Escorcio

I could understand reducing an overdraft to lower your available credit (in order to appease potential future underwriters)

Hominu

Escorcio wrote: »

I could understand reducing an overdraft to lower your available credit (in order to appease potential future underwriters)

If you were changing from 10K to 1K then I would agree.

But from £1000 to £750 isn't going to change much for potential future creditors. It might even be seen that the bank have done it rather than the customer requesting it, so it might even put them on edge, as it were.

matttye

Hominu wrote: »

I've never understood why people do this - they have a £1000 overdraft which is costing them nothing, and they want to reduce it which involves cancelling the old one and applying for a new one, which involves a credit search.

You never know what is around the corner, if your car breaks down (or your boiler packs up, etc) and you need that £1000 overdraft, you can now no longer have it and you'll be into unauthorised overdraft territory and horrendous charges.

I have a £1000 overdraft on an account and have never used it in the last 10 years, but I wouldn't dream of cancelling it, just in case.

You-kip wrote: »

Why anyone would reduce their Overdraft is beyond me.

opinions4u wrote: »

Many people (and the OP is not one of these) think an overdraft limit or a credit card limit is a compulsory spending amount that has to be hit within a short timescale.

They think that by reducing it they will spend less. Unfortunately it merely accelerates their journey to the PDL companies.

I can understand the mentality because I used to hit my overdraft limit every month even though I had savings.

It was just a case of, I've put away savings for the month, now I'll spend whatever available money is left.

Subsequently cleared overdraft with savings and don't bother with them know.

Maestro.

stclair wrote: »

Youll be suprised the amount of people that think its benifical to them when it really is not. I work in lending myself and come across this every day :eek:

Well maybe if banks weren't so secretive about how credit scoring works, and didn't just rely on a "computer says no" design people wouldn't do things like this. It almost seems as if banks deliberately set out bizarre "rules" and have a chart on the wall waiting for customers to make the "wrong" choice to see who can get the most flunked applications. "This one reduced his credit card limit last week, let's fail his application based on that". "That one closed two credit cards, let's flip a coin and see whether we'll approve this application". Problem is, it's never consistent and it's all hush hush, so silly innocent things lead to perfectly eligible customers being fobbed off.

Note I am not talking about obviously stupid things here, but the little inconsequential things that seem to affect scoring, such as credit limits and this so called, elusive "risk" factor. Banks pay us paltry interest on our money and then have the cheek to lend it out at 17.9%, and then for the privilege they further fob us off... gotta love it!

opinions4u

Maestro. wrote: »

Well maybe if banks weren't so secretive about how credit scoring works, and didn't just rely on a "computer says no" design people wouldn't do things like this.

Do you think advertising how to fiddle credit scoring is a good idea?

Banks pay us paltry interest on our money and then have the cheek to lend it out at 17.9%, and then for the privilege they further fob us off... gotta love it!

Perhaps savers would get more and borrowers would pay less if there wasn't an industry in place (of which his board is part) which makes it easy to reduce / stop paying your loan payments when you budget badly and prioritise non-essential spending.

All that waived interest / written off capital has to be paid out of something.

Maestro.

opinions4u wrote: »

Do you think advertising how to fiddle credit scoring is a good idea?

It's not "fiddling" if no fraud is being committed. If you get declined by a bank, and they say right Mr X, in order to lend to you we want the following from you:
-not missed a payment in the last two years
-earn more than £20K
-don't have more than 50% of your total credit used
-pays off mostly in full

and you then go away, work hard to meet those requirements, apply again and fill out the application form truthfully with said improved conduct, and get the product - no fraud has been committed, so there is no "fiddling".

The best you get nowadays is a flat out decline with little but a generic explanation why, so you don't know what was wrong until you pay to see your credit report (oh how convenient) and then spend the next few credit searches guessing. It's almost as if the banks enjoy it, and the only one I've ever seen which actually comes close to not being smug about the fact is Capital One, who do have videos on credit management.

The system just seems inherently designed as a virtual set of hurdles which has no real effect but !!!!ing people off. If anti fraud measures are as good as they say they are, then companies can publish the criteria for the kind of customers they want, and when Joe-minimum-wage-Bloggs goes to apply for AmEx sooperdooper he will be listed the basic expectations beforehand and can either forget it or not be surprised when he is declined. Boom, simple, both parties go on their way without any feeling of annoyance. The bank hasn't lost out, and the customer knew they weren't in with a chance anyway.

Is that really so bad?

All that waived interest / written off capital has to be paid out of something.

Well, it certainly isn't being paid out of the pockets of the top 2% who live lavish, rich lives while the rest of us struggle on by. I know that's a very "lefty tree hugger" comment but perhaps if wealth was actually distributed more fairly none of these issues would arise. I certainly don't think it's right that companies all over the place plead poverty (at the dispense of their customers) while bosses continue to enjoy pay rises and perks.