Basic account effect on good credit rating

[Deleted User]

bengal-stripe wrote: »

You might not be able to open another account, in addition to the ones (how many?) you already hold.

I've opened a basic account, despite already having two regular current accounts.

ma5k

bengal-stripe wrote: »

You might not be able to open another account, in addition to the ones (how many?) you already hold.

A basic bank account is likely to cost the bank money. From the bank's viewpoint, it is a subsidized account. The bank will open a basic account if no account is available, there is a need to hold one account. and you won't qualify for a proper current account.

In your case, the 'need' doesn't seem to apply.

Interesting point - I’ve never experienced a problem opening an account & wasn’t aware that there was a ‘need threshold’ for Basic Accounts! …I currently hold a number of accounts which (apart from a business account) are all technically ‘subsidised’ as I am careful to never incur charges. Or buy unnecessary ‘products’!

My ‘need’ is purely for damage limitation in the event of online fraud (an isolated account with limited funds & no overdraft facility). While credit cards provide adequate protection, bank accounts in general still seem to offer very limited hassle-free protection. I’ve managed to avoid providing bank details online to date, but with international transfers etc this is now inconvenient, so I’m looking for an account I can put at risk without loosing sleep!!

I will have to read the small print, but hopefully posts by other members suggest I would hopefully be eligable.

But, as you mention, Basic Accounts do seem to imply financial difficulty & this is my concern as I do not wish to have that effect on a future credit search if I ever need one (eg to raise money urgently for a family medical emergency abroad not covered by insurance & beyond instant access savings).

itsanne

Would a basic account actually do what you want it for? I know someone with a basic account where the associated card can't be used online, just to take cash out of the hole in the wall. (I don't know if others are the same.)

sirwiggum

Could you not just open a pre-paid card such as cashplus and use this as a 'basic' account?

It has an associated bank account number / sort code, you can transfer money in and out of it, and you can use the card number like a debit/credit card.

Basically you can use it as a bank account.

No banks are associated - MasterCard themselves run it, and, on my credit file at least, it doesn't appear.

ma5k

Update:

I talked to the manager at one of the banks I hold a current account with today. Initially she queried my wish to open such an account, but then agreed it was most suitable for my intended needs.

She said that a full credit search is always conducted when opening an account & this would be recorded on my file, but that if I proceeded it would not then show the basic account type. She did warn me however that it would have an adverse effect when being assessed internally by that bank, & so strongly advised me to open one only with a bank I did not use for anything else.

Hope this is useful if anyone else is in a similar situation

BugsyBrowne

ma5k wrote: »

Update:

I talked to the manager at one of the banks I hold a current account with today. Initially she queried my wish to open such an account, but then agreed it was most suitable for my intended needs.

She said that a full credit search is always conducted when opening an account & this would be recorded on my file, but that if I proceeded it would not then show the basic account type. She did warn me however that it would have an adverse effect when being assessed internally by that bank, & so strongly advised me to open one only with a bank I did not use for anything else.

Hope this is useful if anyone else is in a similar situation

So the Bank manager is actually credit searching you for a full current account.

ma5k

BugsyBrowne wrote: »

So the Bank manager is actually credit searching you for a full current account.

If I understood her correctly, the credit search would be exactly the same, whether for a 'Full Current' or 'Basic' account.

stclair

I think there is a lot of confusion regarding credit scoring and basic bank accounts.

Normally only an anti money laundering search and indentity checks would be done for basic bank accounts, non of which would be visable to other lenders.

However a lot of people report a full credit search has been done, however I'm yet to see evidence of this fact.

ma5k

stclair wrote: »

However a lot of people report a full credit search has been done, however I'm yet to see evidence of this fact.

Only reporting back what the manager said today!

datlex

I had a basic Barclays account until recently alongside my main account at a different bank as it suited my needs. I recently changed to a current account with them as it allowed me to change my Barclaycard to a rewards one. (applied as a customer of bank rather than as non customer- can't do that with a basic account).
Customers with basic accounts at Barclays can't get credit with Barclays. (I had my Barclaycard before I opened the basic account) I'm not sure about other banks.