Going off jobseekers; should I change bank to improve my credit?

Poita

I've been receiving jobseekers allowance and housing benefit for some time and I'm going off it as I am now in the process of starting a business.

I have had a Santander 123 account for about a year and have been receiving the jobseekers and housing payments to that bank and I'm told that it has caused a red cross on my otherwise faultless credit from the bank's point of view so my banks score has hit a ceiling of around 630 (my Experian score is 'fair').

Now that I will be soon forming a Ltd company and also hope for personal and business loans in a year or two as well as being able to use credit cards then I'm hoping that not being on Jobseekers or housing benefit 'and' having some money in my account as well as gradually increasing it will cause my credit to improve.

So my question is: Is it better to stay with Santander and also open a business account with them or is it better to keep the Santander account yet open a personal and business account with a different bank such as HSBC or Halifax?
On the one hand, my one year (123) account and the one year basic account before that gives me a spotless two year history with Santander but then I have to balance that against their 'memory' that I was on jobseekers/housing. Do they cancel each other out or does my good record with Santander continue but the unemployed status get ignored?

So, better to stay with Santander in expectation of personal and business loans in the future or start fresh with another bank and hope my 'fair' credit gets transferred but not my 'unemployed' history?

CLAPTON

why not have two bank a/cs?

p00hsticks

I'm not expert, but until your business has been established for a while I'm not sure that being self employed is great for your credit record either....

Poita

@Clapton: I don't know what a/cs means?

@p00hsticks: Well I'm starting a business so I don't have any choice about being self employed. So seeing as that is going to be my reality my question still stands.

DCFC79

Poita wrote: »

@Clapton: I don't know what a/cs means?

.

Stands for accounts

Not an expert but the banks score of 630 is of no relevance and the experian rating of " fair " is of no use.

nicp60

Poita wrote: »

I'm told that it has caused a red cross on my otherwise faultless credit from the bank's point of view so my banks score has hit a ceiling of around 630 (my Experian score is 'fair').

Told by whom? What data is held on your experian file? Simply receiving benefits shouldn't create any adverse data on your report; although it could be that Santander don't want benefits recipients as customers if you're being told that.
The only negative information that will impact your report is missed payments, defaults, late payments and not being on the electoral roll etc.

Please ignore the experian number and 'fair' - it's a load of nonsense that only you (and not potential business lenders) can see.

izools

As above - being in receipt of benefits in and of itself has no impact whatsoever on your credit file.

Having too little money to for example pay a big loan and falling into arrears would have a negative effect but that's due to missing payments, just as you might having taken a big pay cut.

It sounds like whoever told you about this "red flag" is making it up and talking absolute nonsense.

Experian_company_representative

There's no flag about benefits on a credit report but lenders do factor their internal records into credit decisions too so it could, I guess, be an issue for your existing bank. Only they can confirm this.

James