Current account switching frequency

Anthorn

InsideInsurance wrote: »

As its a balancing act of stopping promotions being abused and putting barriers in the way of genuine customers. What are you suggesting is done to check the 12 month requirement? You have to get a letter from your current bank confirming how long you've been with them? Have to provide a year worth of statements for the account?

Why a letter to confirm how long you've been with the bank? It's shown on your credit history.


As I posted in another similar thread, in a nutshell keep your longest held account as your main account and don't switch it. Then switch lesser, newish accounts. In that way the negative impact on your credit history should be negligible. But then again, it all depends on who is viewing your credit history.

shortcrust

Anthorn wrote: »

Why a letter to confirm how long you've been with the bank? It's shown on your credit history.

Lenders can't see who your accounts are with so credit history couldn't be used for that purpose.

The banks know that some people with switch spare accounts just to get the incentive, but they obviously think that's a price worth paying.

masonic

anoncol wrote: »

Surely really genuine switchers will have accounts for either years or for only weeks/months.You leave if you are unhappy with the bank which you find out quickly.

Sometimes it is driven by a bad experience. Or their local branch might be closed. Or they might move house and find another bank is more convenient in their new location. Or their financial circumstances could change, allowing them to qualify for an account they couldn't get before. Or they simply decide it is time to get a better deal for themselves. There really are a multitude of valid reasons that could come into play at any time.

InsideInsurance

Anthorn wrote: »

Why a letter to confirm how long you've been with the bank? It's shown on your credit history.

Because the new bank cannot tell from what they see on the CRA file how long you have held that particular account. If you'd only just opened it in the last few weeks to switch it wouldnt even appear on the CRA file

So yes, they could see you've had one account for 10 years, one for 2 years and one for 2 months but not which of those the supplied sort code and account number relates to.

Now you could try and argue they could phone each other without asking permission on the grounds of Counter Fraud but that would require them to call the true counter fraud team of the donor bank as they are the ones with the ways to ID each other and given how busy these teams typically are (my ex worked in one) if another bank started making several hundred calls a day just to support marketing activity they arent going to get their answers for very long

BootstrappistMonk

I too mainly signed up to ask about this - I'm in the process of setting up a 'parallel' current account (starting anew with Tesco because they already have my details from the Credit Clubcard and they seem unlikely to offer a switching bribe of their own at any stage) - I'd be interested in any of these cautionary articles mentioned by @alex1793. I'm hoping to apply for a mortgage in less than a year and would hate to find out I'd shredded my credit rating for the sake of maybe £600 in tart bribes that I only wanted for building a better deposit!

I didn't twig until today that applying for a new current account involved a credit check (apparently even when one opts out of the overdraft...) so am unsure if all this speculation surrounding account start dates is relevant. Wouldn't the prospective lender see, for instance, something like:

AUG 15: credit check (TESCO)
AUG 15: credit check (TSB)
OCT 15: credit check (M&S)
DEC 15: credit check (Co-op)
FEB 16: credit check (Halifax)

etc, etc, making the applicant appear desperate in precisely the manner warned against in every credit rating guide?

EDIT: some slightly more ambitious searching has turned up only the 'stability' reason, backing up InsideInsurance and Anthorn's statements that keeping the original long-term account and using a chain of lesser switching would all but eliminate this problem - is my initial understanding of credit checks faulty?

Kim_13

Keep an old account, then it doesn't matter that much as long as it doesn't get to ridiculous levels. It would also help if there were other items on your file (catalogues, phone contracts) that upped the average age of your accounts.

I've recently done my second application this year. I'll have 4 current accounts then. I'm yet to actually switch, I just wanted the accounts for the interest/to set up some other 'pots.'

The other two current accounts I've had for almost four years and 7 years respectively. I'd love to switch my NatWest if it wasn't the 7 year account. I did however end up giving the 4 year ish account in my recent application, as I was asked for sort code and account number as well as how long I'd held it. As I avoid NatWest like the plague these days and the account number isn't written on the card, I didn't have it to hand to go for the 'preferred' answer. It wasn't an issue, but perhaps it would be if I were making a 'big' application.

I'm personally sticking to one every 6 months if I can now. A few years back, before I became more savvy, I ended up doing three in two months. One to upgrade my Nationwide account to FlexPlus, one for a Nationwide overdraft (£100 is fee free on FlexPlus so I thought why not, a month or so after I'd upgraded with no overdraft), then one for a Capital One card. I got all three.

InsideInsurance

BootstrappistMonk wrote: »

making the applicant appear desperate in precisely the manner warned against in every credit rating guide?

EDIT: some slightly more ambitious searching has turned up only the 'stability' reason, backing up InsideInsurance and Anthorn's statements that keeping the original long-term account and using a chain of lesser switching would all but eliminate this problem - is my initial understanding of credit checks faulty?

Credit checking is complex and each company has its own preferences/ algorithms etc

Generally speaking having lots of credit searches is a bad thing, the rule of thumb most quote is no more than 2 in a rolling 6 months but again what each lender will consider acceptable will vary.

Financial stability is another consideration and can be partially helped by keeping an old standing account rather than using it for the switching.

Mortgage applications tend to be a much more considered response than a simple computer running a single check and coming back with a yes/no answer so perhaps you can explain it away better but also the consequences of getting a decline tends to be much more significant and so its it worth doing just for the few bits of marketing money

jimjames

BootstrappistMonk wrote: »

I too mainly signed up to ask about this - I'm in the process of setting up a 'parallel' current account (starting anew with Tesco because they already have my details from the Credit Clubcard and they seem unlikely to offer a switching bribe of their own at any stage) - I'd be interested in any of these cautionary articles mentioned by @alex1793. I'm hoping to apply for a mortgage in less than a year and would hate to find out I'd shredded my credit rating for the sake of maybe £600 in tart bribes that I only wanted for building a better deposit!

I didn't twig until today that applying for a new current account involved a credit check (apparently even when one opts out of the overdraft...) so am unsure if all this speculation surrounding account start dates is relevant. Wouldn't the prospective lender see, for instance, something like:

AUG 15: credit check (TESCO)
AUG 15: credit check (TSB)
OCT 15: credit check (M&S)
DEC 15: credit check (Co-op)
FEB 16: credit check (Halifax)

etc, etc, making the applicant appear desperate in precisely the manner warned against in every credit rating guide?

EDIT: some slightly more ambitious searching has turned up only the 'stability' reason, backing up InsideInsurance and Anthorn's statements that keeping the original long-term account and using a chain of lesser switching would all but eliminate this problem - is my initial understanding of credit checks faulty?

I've had at least that number of current accounts opened in that timescale along with multiple credit cards and 3 mortgages approved.

So either the credit checks have no impact or I've got a good rating that isn't affected by them. Either way, opening lots of accounts still had no effect.