Should I cancel my oldest bank account?

chisypasta

With the Lloyds and TSB split my nicely organised bank accounts are now spread over the two banks so rather than move back to Lloyds I figure I may as well move our finances to a better account, either First Direct or the Santander 123 depending on which works out better value for money.

My question is if I close all my Lloyds and TSB accounts will this negatively affect my credit at all? We've just been accepted for our mortgage so we're not going to have any major credit applications coming up but I've heard that it is good to keep your oldest bank account open as means of tracking your financial history.

Any advice would be greatly appreciated.
Thanks.
Jamie.

YorkshireBoy

I'd keep it open, and just bounce a couple of transactions a year through it. Then close it in 4-6 years time.

I'm still maintaining a YB current account that I've had for 30+ years...purely for the positive impact it has on my credit rating.

That said, with the upcoming changes to switching bank accounts (whereby old accounts are closed as part of the switch) maybe lenders will modify their credit scoring algorithms to take account of this?

On balance, I'd still keep it open though, at least until you've got your feet under the table in your new house(?). Because new address and new (oldest) bank account may flag up instability (to a computerised scoring system at least).

chisypasta

Thanks very much for the useful info. I'll probably keep it open in that case. I assume that it's wise to close the overdraft facility on it, even though part of it is an interest free graduate overdraft. If I'm not using it then it still counts as available credit right?

The new address, new bank account issue shouldnt affect me as we are purchasing the flat we have lived in for 2 years so addresses aren't going to change!

Thanks again.

typistretired

Why close it, you never know when it might come in handy. I have had only £1 in a current account with Halifax for years and now use my log in details with them to access my Bank of Scotland accounts.

libertarian_2

With the new changes to bank accounts coming up next week will it still be possible to keep more than one current account open ? I ask this as if you want to change banks part of the process will involve closing your old account. It doesn't seem possible to keep the old one open. Seems very restrictive to me.

Maelwys

libertarian wrote: »

With the new changes to bank accounts coming up next week will it still be possible to keep more than one current account open ? I ask this as if you want to change banks part of the process will involve closing your old account. It doesn't seem possible to keep the old one open. Seems very restrictive to me.

If you're SWAPPING banks (as-in just switching account providers and keeping everything else the same) then yes, the old account will close. There's nothing to stop you opening a brand new account and moving a few Direct Debits over manually though.

chisypasta

typistretired wrote: »

Why close it, you never know when it might come in handy. I have had only £1 in a current account with Halifax for years and now use my log in details with them to access my Bank of Scotland accounts.

Initially I would have closed it just as a tidiness thing. Less to keep track of essentially.

However it also occurs to me that by shutting down the account now I will be a 'new customer' should I choose to return to Lloyds in the future and therefore eligible for any 'new customer only' deals.

I'm still undecided on the matter, it seems like there are benefits to both keeping it open and closing it but nothing substantial.

Archi_Bald

One advantage of keeping the old account is so you can truthfully say you had your current account for x years. Useful on applications for mortgages, credit cards, other current accounts etc

badger09

chisypasta wrote: »

However it also occurs to me that by shutting down the account now I will be a 'new customer' should I choose to return to Lloyds in the future and therefore eligible for any 'new customer only' deals.

Not necessarily. Some banks have very long memories