Does moving accounts Reduce Credit Score

JakeWazza

Okay so I am a 20 Year old student, I started around 2 years ago with a Luma card which was always paid off in full every month, however around 6 months ago I decided to see if I could then qualify for any better cards, when I found out I would qualify for a capital one Cashback Card, which I did, so I switched to this card and earn about £4 cashback a month, not much I know but it's almost £50 a year when paid so I can't complain.

However now Capital One are about to scrap the Cashback due to new EU regulations, so I have this week switched to a 123 Current account with Santander, as I never used my Lloyds Student overdraft so though I would be better closing my 1.5% ISA and putting all my savings in my current account earning 3% with Santander. I then noticed I may now qualify for a 123 Credit Card, I use around £30 of Diesel a week as well as food shopping etc so I was thinking would it be worth while me swapping to this as I would continue to earn about £50 cashback a year as before, however I didn't know if showing that you regularly switch accounts would have any negative effect on credit rating?

In Short

Does regularly Switching Current accounts and Credit Cards have a negative effect on Credit Rating?

Tixy

Opening new accounts can have a short term impact on your ability to get accepted for credit.

One of the things lenders do often consider is length of time credit accounts have been open. Longer held accounts can be viewed as a sign of stability.

So whilst its sensible to open new accounts for better deals, it may be worth keeping an older credit card account open as well and using occasionally.

The_Boss

Yes it will. Then again, I walked out my front door the other day, sneezed a few times and when I got home checked my Noddle credit report and nothing had changed at all except the "score", which had gone down from 5 to 4. So sneezing in public affects "credit scores" too.

As above, it's the data on the report that's important and therefore worth keeping an old card or two so that you can be seen as someone 'stable'. Could you not keep the old account/Capital One card open if accepted for the new ones and then just use it sparingly?

JakeWazza

I'll just stick with Capital One then probably, the Credit Card is there to build my Credit Record, the cashback would of just been a bonus.

20aday

If it helps OP give it six months and then try and apply for the Santander 123 CC.

I opened my Lloyds a/c in March 2014 and tried for the Choice Rewards Duo and they rejected me. Gave it six months, tried again, and was accepted.

And as 'The Boss' says keep the Capital One card as a back up to reinforce your credit history.