Credit Checks for Joint Account

MysteryQueue

Hello, I've been trying to set up a joint account recently with my girlfriend as we have decided to budget and try and clear our combined debt which is mostly left over from university (:beer:) and attempt to start saving for a deposit on a house.

The plan was we set up a joint account, each pay in £1000 a month and set up all our direct debits to come from that account. Simple. Except I've tried to set up an account with Co-op firstly, then when it was declined Nat West, which was also declined, both for failed credit checks.

I'm wondering if someone could explain possible reasons for this? We have what i consider a high level of debt on CC's etc. but we are not asking for credit on the joint account, no overdraft etc. and will be paying £2000 a month into the account. I just cant understand what risk the bank would be taking in setting the account up for us?

If anyone could suggest a better plan, a suitable joint acc., or just any advice on how to improve our combined credit rating enough to open one that would be appreciated!

grumbler

MysteryQueue wrote: »

Hello, I've been trying to set up a joint account recently with my girlfriend as we have decided to budget and try and clear our combined debt which is mostly left over from university (:beer:) and attempt to start saving for a deposit on a house.

For this you don't need a joint account. A sole one can do the job perfectly.

The plan was we set up a joint account, each pay in £1000 a month and set up all our direct debits to come from that account. Simple. Except I've tried to set up an account with Co-op firstly, then when it was declined Nat West, which was also declined, both for failed credit checks.

I'm wondering if someone could explain possible reasons for this? We have what i consider a high level of debt on CC's etc. but we are not asking for credit on the joint account, no overdraft etc.

You aren't asking for an agreed overdraft. Even without it most accounts don't stop you from using unplanned oferdraftt.

and will be paying £2000 a month into the account.

You say so.

As you say, your credit files are imperfect. Any joint product links your files together so that the worst file affects a better one. This link, once created, starts affecting even sole products applications.

If anyone could suggest a better plan, a suitable joint acc., or just any advice on how to improve our combined credit rating enough to open one that would be appreciated!

As above, you don't really need a joint account.
If you think that the main reason is high level of debt then the only way is to reduce this level. For any other possible reasons check the files from all CRAs. E.g. banks don't like applicants that change address frequently or with more than one active address reported.

MysteryQueue

Thanks for the reply.

I suppose you're right in that we don't need a joint account for it but it would just make the whole process easier. We've set out our budget so thought if we have a joint account that was basically the "budget" account, we can just split our wages between our own accounts and that, let all the bills come out each month, never withdraw from it and that way debt would be paid off at a set monthly rate and savings would be built up.

YorkshireBoy

grumbler wrote: »

Any joint product links your files together so that the worst file affects a better one. This link, once created, starts affecting even sole products applications.

Even applying unsuccessfully for a joint current account will create a financial association at the CRA(s) with some (many/most/all?) current account providers.

grumbler

YorkshireBoy wrote: »

Even applying unsuccessfully for a joint current account will create a financial association at the CRA(s) with some (many/most/all?) current account providers.

How can this be with some providers?
My understanding is that the link is created in the files (CRA).

Regardless, if you are right, I think this link can be broken like after closing all joint accounts.

MysteryQueue

YorkshireBoy wrote: »

Even applying unsuccessfully for a joint current account will create a financial association at the CRA(s) with some (many/most/all?) current account providers.

We are both going to pay for a credit report next week so we can try and find out where the problem is and address it.

So by applying for those two accounts, has this also put a negative mark on the credit reports because they were declined?

grumbler

MysteryQueue wrote: »

We've set out our budget so thought if we have a joint account that was basically the "budget" account, we can just split our wages between our own accounts and that, let all the bills come out each month, never withdraw from it and that way debt would be paid off at a set monthly rate and savings would be built up.

Why does it have to be a joint account and not a sole one used for joint expenses?

MysteryQueue wrote: »

We are both going to pay for a credit report next week so we can try and find out where the problem is and address it.

How much are you going to pay and for which one?

So by applying for those two accounts, has this also put a negative mark on the credit reports because they were declined?

Credit searches get recorded and have negative effect, especially if many in short period. Declines don't get recorded.

Start with reading MSE article: Credit Scores

firefox1956

MysteryQueue wrote: »

Thanks for the reply.

I suppose you're right in that we don't need a joint account for it but it would just make the whole process easier. We've set out our budget so thought if we have a joint account that was basically the "budget" account, we can just split our wages between our own accounts and that, let all the bills come out each month, never withdraw from it and that way debt would be paid off at a set monthly rate and savings would be built up.

You are making things complicated ??
Just open another sole account & pay both your monthly amounts into that surely ??

YorkshireBoy

grumbler wrote: »

How can this be with some providers?
My understanding is that the link is created in the files (CRA).

Regardless, if you are right, I think this link can be broken like after closing all joint accounts.

The bank "confirms" the association with the CRA. For example, Halifax say...

If you apply for or hold an account in joint names, or tell us that you have a spouse or financial associate, a financial association will be created between your records, including any previous and subsequent names used by you.


http://www.halifax.co.uk/securityandprivacy/privacy/?srnum=1

I've also noted similar wording (some specifically saying "whether the application is successful or not") in other providers' privacy policies.

grumbler

So, do I understand correctly, that if you apply to some(?) banks they report the association and it remains in the file visible to all lenders?

YorkshireBoy

grumbler wrote: »

So, do I understand correctly, that if you apply to some(?) banks they report the association and it remains in the file visible to all lenders?

That's my understanding, yes.