Credit Check for Reducing Overdraft !!!!

JJ1066

I have filed a complaint with the Financial Banking Ombudsman due to my bank and most peoples banks doing a credit check when clients are asking to have their overdrafts reduced ( in my case by £100 a month ), while i think asking for an increase merits a credit check it should not apply for a reduction .
Its almost like they don't want us to reduce our debt !
Have to wait at least a while for a response .
Has this been challenged before ?

Thrugelmir

Have you read the term of your bank account that you signed up to?

Not sure what you are hoping to achieve but your time maybe more productively spent with other pursuits.

GingerBob_3

JJ1066 wrote: »

I have filed a complaint with the Financial Banking Ombudsman due to my bank and most peoples banks doing a credit check when clients are asking to have their overdrafts reduced ( in my case by £100 a month ), while i think asking for an increase merits a credit check it should not apply for a reduction .
Its almost like they don't want us to reduce our debt !
Have to wait at least a while for a response .
Has this been challenged before ?

It's bizarre. It shouldn't be done as a matter of principle, and you're right raising the issue with the FBO. No doubt the bank will have some get-out clause in their lengthy T&Cs, but let us know what response you get.

Westminster

If you were looking to reduce the overdraft facility to 0 then I think it is fair and reasonable to expect no credit search.

However, in any other event, you are effectively applying for a new overdraft limit (regardless of whether it is more or less) so I'm not particularly surprised that this invokes a search.

pelirocco

As company directors every time the company takes on a new financial commitment be it a purchase of an assett , renewing our insurances etc we have a new search of our personal credit file, it doesn't appear to make any impact on our personal credit needs

stclair

Do you definatly know the bank have actually credit scored you for each reduction?

Some of them say they will credit score you but actually don't.

Nasqueron

JJ1066 wrote: »

I have filed a complaint with the Financial Banking Ombudsman due to my bank and most peoples banks doing a credit check when clients are asking to have their overdrafts reduced ( in my case by £100 a month ), while i think asking for an increase merits a credit check it should not apply for a reduction .
Its almost like they don't want us to reduce our debt !
Have to wait at least a while for a response .
Has this been challenged before ?

What are you hoping to achieve? I presume you aren't naive and paying for a credit score from Experian or Equifax and believe a reduction in that "score" is in any way meaningful?

Companies do credit checks all the time, you see it at renewal time for car insurance if you use a comparison site, these things are meaningless and have little to no impact on your ability to get credit

takman

JJ1066 wrote: »

I have filed a complaint with the Financial Banking Ombudsman due to my bank and most peoples banks doing a credit check when clients are asking to have their overdrafts reduced ( in my case by £100 a month ), while i think asking for an increase merits a credit check it should not apply for a reduction .
Its almost like they don't want us to reduce our debt !
Have to wait at least a while for a response .
Has this been challenged before ?

If they didn't do a credit check then they would be open to people calming they were missold the new overdraft limit. By doing a credit check they have proof they have done reasonable checks.

If you want to reduce debt then simply use less of the overdraft!.

redux

Surely there aren't any overdraft fee schemes related to the facility size? They seem to be either flat daily fees while used or interest related.

For example my Halifax overdraft limit is £2100, and the fee is £1 a day up to £2000, £2 a day over that. But there is no need to ask reduce the limit below £2000, and actually I don't foresee using it for some time anyway.

Ben8282

If I understand you correctly, you are asking your bank to reduce the amount of your overdraft facility by £100 every month.
The first question is why? Reducing the overdraft facility will not reduce your debt as such, only stop you using the extra. Can't you trust yourself not to use an unused £100 of the facility?
If I were your bank I would get a bit fed up with this pretty quickly and remove the overdraft facility altogether.

Southernman

I think you will struggle to get anywhere with the ombudsman. It's normal practice for a credit check to be made in this situation as every time you reduce the facility a new albeit smaller overdraft facility is awarded.