Junior/teenage accounts and credit ratings

jmj_3

My daughter has just discovered that because she has a Lloyds U19 bank account (even though she reached this age 4 months ago and has not been prompted to convert it) this does not contribute to her credit rating because there is no overdraft facility on it. Had she realised it would have this impact, she would have changed to an adult account when she was 18 because she is in full-time, well paid permanent employment and has been for 14 months - with her salary being paid into her bank account. She is complaining to Lloyds that she was not made aware of this. (If it was in the small print, she would have been 16 when she took out the account and expecting either to have a student account at 18 or an adult bank account later.) It also seems they are happy to give credit cards to students but not 19 year olds with a good financial record; employment history and regular income.


(There has to be something wrong with the current rating system if it penalises financially responsible people. Perhaps we should lobby politicians about this before next election!)

SuperHan

No one is obliged to report to the CRAs, and if there is no credit offered then of course they are not reporting - this is just common sense, surely?

There'd be even more uproar if she had gotten bad credit as a result of this and not known that it was reporting to the CRAs as it was a junior account.

She's not that much older than 18 that it would have made much of a difference.

If she wants to report to CRAs, get a credit builder credit card, contract mobile phone, overdraft, and she can start to build up a credit rating that way.

But really, there's been no measurable damage (or even immeasurable really) so I wouldn't expect too much to come out of a complaint.

She is an adult now, if she wanted an adult bank account what was stopping her going getting one of her own back instead of waiting for the bank to hand it out.

Thrugelmir

Having an overdraft does not contribute to a credit rating. Using an overdraft will however be detrimental.

There's nothing adult about having a credit card either.

stclair

As previously said lenders are not obliged to report data to the CRAs.

I personally have two accounts with lloyds with an overdraft attached to them both and they don't report to the CRAs either.

You may want to read this prior to raising any concerns.

http://www.ombudsman-decisions.org.uk/viewPDF.aspx?FileID=55839

dresdendave

This is a no-win situation for banks. Your complaint is that the bank did not contact your daughter to suggest she changed to an "adult" account with OD facility etc.


However if they were to encourage teenagers to convert to accounts with OD facilities, when said teenager maxes out their OD and struggles to pay it off, no doubt irate parents would blame the bank for "forcing" their child into debt.


Please note the above is a generic scenario, I'm not suggesting this necessarily would have applied in your daughter's particular case.