Bank account loyalty - does it matter?

mcmahon2525

Hi there

I want to switch my current account to a different bank and understand how easy it is to do these days. What's holding me back is that in credit applications lenders always ask which bank your current account is with and how long you have been with your bank. I've been with my bank over 20 years - if I switch to a new bank account, will this affect my credit rating when applying for loans/mortgages, etc?

I would have thought my incomings/outgoings and money management would be more important.

Please help!

YorkshireBoy

Yes it matters, otherwise they wouldn't ask. Just how much it matters is anyone's guess, but if you're borderline in other 'stability' criteria, eg address, employment, etc, it could tip the balance.

If it bothers you, open another account with the bank before switching the original to maintain your 20 years 'time with bank'.

Monkey2801

I'm interested in this too. I desperately want to leave Santander and move to First Direct but I've been with S for 25 years and wouldn't want it to have a negative affect on my credit?

Any help?

Nebulous2

Have more than one current account.

I had been with Clydesdale since I was at school and felt pretty loyal. Then they messed up and dealt very badly with my complaint.

I moved, opened more accounts for opening bonuses, and am benefiting from high interest and cashback deals. I really cannot understand now why I didn't do it sooner.

At one time I applied to Bank of Scotland for an account and never fully opened it. It had no money in it. Somehow this account sprang back into life when TSB was divested. As they were offering 5% interest I started using it, so it looks as if I have had an account for over 3 years when in reality it is less than one.

Again I couldn't imagine going back to one account but will keep one of the older ones going to not show that all my accounts are new.

David_White

There has been massive change in the retail banking industry the last couple of years specifically to make it easier for people to switch current accounts. This wouldn't have happened if people would get penalised for doing so.

I would be staggered if someone was declined on something for the sole reason that they'd changed bank account.

MataNui

Its impossible to know but i would guess it does.

Time with current bank is asked on all credit forms and stored by the CRAs. Its also important to remember a person doesnt have any input in deciding if you are credit worthy or not. Its all done by computer. If it wasnt used in the automated calculation i cant see why it is asked.

Of course these algorithms are proprietary and trade secrets so there is no way on this planet any of the CRAs or financial institutions are going to tell you what they use, so you will never be sure. I would say to be safe downgrade your existing account to a free one and leave it open.

Monkey2801

In order to get the opening bonus for FirstDirect you need to use their switching process which fully closes your previous account (from my understanding). This would mean my longest account of 25 years would completely disappear.

is there any way of doing it without completely closing the other account?

YorkshireBoy

Monkey2801 wrote: »

In order to get the opening bonus for FirstDirect you need to use their switching process which fully closes your previous account (from my understanding). This would mean my longest account of 25 years would completely disappear.

is there any way of doing it without completely closing the other account?

Yes. Simply open up another account with them and either switch that one or switch your original. Sometimes you can't see the wood for the trees!

Thrugelmir

mcmahon2525 wrote: »

money management would be more important.

A long standing relationship with a bank is a clear indication of good money management. Personally it's always stood me in good stead when I've needed some out of the ordinary assistance.