Will changing my bank account affect my credit rating?

yvonnemcnx

Hi everyone,

I am just looking for a little bit of advice regarding bank accounts/credit file.

My credit rating is really poor and I am currently working on improving it. I have satisfied all of the defaults on my account apart from one - but I am making agreed payments to that each month.

I have seen the offer on here of switching bank account and receiving a £125 cash incentive and I was considering doing so as it would be beneficial for me at the moment. However, I read on here somewhere that it is better for your credit file to have had a bank account with positive history on it for a few years (I have been with my current bank for about 7 years with good history)... Therefore, do you think it would make my credit file worse for me to change banks or would it not really make a difference?

Thanks in advance,
Yvonne.

solentsusie

Hi Yvonne

If you have a poor credit file and recent defaults you may well not be accepted for another mainstream bank current account. Satisfied defaults look better than non satisfied but a number of banks are still fussy about them. As far as they are concerned, whether you want an overdraft facility or not, you are applying for credit so may well decline you.

I still have a couple of very old defaults on my file and some banks will still not offer me a current account. Others have. It all depends on their criteria.

Good luck.

stator

Switching your bank account will have a small negative effect on your credit score. If you want to apply for credit soon I wouldn't do it.

Thrugelmir

Lenders may score you lower based on the length of time with your current bankers. Stability is important.

TartanSaver

This depends. If you currently have a basic account, it doesn't appear on your credit file, so the "stability" issue doesn't apply. See the fourth paragraph of this article:
http://www.moneysavingexpert.com/news/banking/2014/10/upgraded-your-halifax-account-this-may-not-be-reflected-in-your-credit-file

If you don't have a basic account, instead of closing your existing one, you'd be better opening a basic account and switching that instead. Of course, there's no guarantee you'll be accepted for the new account. For a switching bonus, I opened a basic account with Barclays, who don't credit check. This means no search footprint on your file. However, it requires you to go into branch.

TartanSaver

I should add - get out of the mindset of having only one current account. I've taken advantage of several switching bonuses and high interest paying accounts in the last year, without ever changing the account I actually use on a daily basis. Good luck with clearing your debts. Sounds like you've made a lot of progress!

HMB1981

I've always kept an old bank account running at the same time as a new one, using it occasionally for little things. I have no idea if it's a good ide or not, but I always figured that as long as I didn't have like 20 accounts running, having an old long serving one and a newer one at the same time might be a good thing.

PaulW922

TartanSaver wrote: »

This depends. If you currently have a basic account, it doesn't appear on your credit file, so the "stability" issue doesn't apply. See the fourth paragraph of this article:
http://www.moneysavingexpert.com/news/banking/2014/10/upgraded-your-halifax-account-this-may-not-be-reflected-in-your-credit-file

If you don't have a basic account, instead of closing your existing one, you'd be better opening a basic account and switching that instead. Of course, there's no guarantee you'll be accepted for the new account. For a switching bonus, I opened a basic account with Barclays, who don't credit check. This means no search footprint on your file. However, it requires you to go into branch.

Actually, most basic accounts DO appear on your credit file - which is good as it enables you to build up a positive history.

However I would agree that with recent or active defaults you won't get a full service bank account for the £125 cashback (Halifax I believe)

solentsusie

PaulW922 wrote: »

Actually, most basic accounts DO appear on your credit file - which is good as it enables you to build up a positive history.

However I would agree that with recent or active defaults you won't get a full service bank account for the £125 cashback (Halifax I believe)

Saying that I got a full service Nationwide FlexDirect account with 5 defaults on file. Albeit three of them were very old. Perhaps you could try switching to this one I believe they have deals on at the moment through cashback sites.

Lots of basic accounts appear on your credit file. I had a basic Barclays and RBS and both appeared on my file.

I still have two old defaults left and Halifax won't give me an account that will let me claim the £125 cashback. I can only get an Easycash from them.

It does all depend on your personal circumstances though.

Good luck.