Credit check done opening bank account?

Jeanclaudvandamme

Hi,

I plan to apply for a mortgage within a few months and intended to follow the advice not to apply for too much credit in the months before.

I already had a current account with Santander and in January I applied for another bank account with an overdraft facility for joint bills (a switch from HSBC). I also applied for a credit card with Santander to do a balance transfer. Both were successful and I thought no more credit checks now.

This month I opened up another two current accounts with Santander to compartmentalise my bills further - on the online application I definitely ticked that I DIDN'T want an overdraft on either. Then I got two letters saying for unfortunately I'm not entitled to an overdraft and "in determining your eligibility for an overdraft facility we consulted the following credit reference agent .. Experian".

I called Santander and they told me not to worry, that it was probably a generic letter. I asked if they could write to me to confirm that a credit check wasn't run for these two accounts and they said they'd best look into whether it was.

So it looks like I have FOUR credit checks on my file within weeks now. Are banks supposed to do credit checks when you're not applying for credit? (This specifically says the check was for the overdraft purpose). If Santander has ran theses checks and wasn't supposed go, can I get these checks deleted does anyone know?

Many thanks.

sharpy2010

You'll need to check the terms and conditions of opening a bank account, it probably says that any account is subject to status and that a credit check will be performed. First step is to see if it says that in the terms and conditions.

YorkshireBoy

You'd have incurred searches for the accounts themselves. I doubt they'd have carried out additional searches for overdraft facilities you didn't ask for, so probably a poorly worded/generic letter?


Banks do take a monthly feed from the CRAs (which doesn't leave a search footprint), so maybe they used this?


At the end of the day though, you say "looks like" and "if", so you may be fretting over nothing. Why not order up a copy of your credit file and see what's actually on there?...then deal with it if they made too many searches (in your opinion).

purple_purple

When opening any type of bank account they credit check you because your credit file contains information about current credit accounts, current addresses and also fraud markers.

Its standard I'm afraid.

PaulW922

I would think that the automated process at the website or branch has automatically done a credit check. A current account is a credit product regardless of whether it has an overdraft or not I'm afraid. If the bank will not immediately help you with a second full current account you could always ask to open a basic bank account to run alongside your main one - it is fine for direct debits, standing orders etc and whilst it is a bit 'basic' in nature it may provide all the services you require.

GingerBob_3

PaulW922 wrote: »

A current account is a credit product regardless of whether it has an overdraft or not I'm afraid.

Yes. Previously it wasn't, but due to CRA scope creep it now is. The fact that YOU are the creditor on such an account means nothing. Don't forget, the banks are doing you a huge favour in allowing you to be a customer of theirs, so it's got to be on their terms - or nothing.

MisterBaxter

The fact that you don't have a pre-approved OD doesn't necessarily mean you can't technically go overdrawn, if they offer a debit card and cheque book you could spend money you don't have, a credit cheque is likely to show if you have done this before.

Thrugelmir

MisterBaxter wrote: »

The fact that you don't have a pre-approved OD doesn't necessarily mean you can't technically go overdrawn, if they offer a debit card and cheque book you could spend money you don't have, a credit cheque is likely to show if you have done this before.

Or you've left an unsettled overdraft on another account at a different bank.