Age/number of bank accounts and effect on credit rating

HornetSaver

I'm starting to get a bit wiser with my money, and part of that involves making my money work for its keep, i.e. putting it into appropriate account.

I've just opened a TSB Classic Plus (opened, not switched), which in the short term makes the most sense to me as I want to aggressively pay off a debt and will therefore have little need to go over the £2000 limit. Besides, if they end their 5% cashback on first £100 of contactless in December 2016, and interest rates start to inch up late 2016 then January 2017 will be a perfect time to consider a switch for the switcher's bonus. That will coincide with the first time I expect to be significantly over £2000 - though if needs be I can always open a third account in the meantime.

I also have my old (rubbish) bank account, which I intend to make more or less dormant as it offers no benefits worth speaking of other than a very good online banking system. But I'm reluctant to actually switch that because I've had the account for 20 years with no red marks against it, and am conscious that in 3-4 years I'm going to be on the hunt for a mortgage.

Any advice on how long before applying for a mortgage I should start to consider not opening new accounts, or on how big a hit losing the 20 year relationship with a bank might have on my credit score?

Superscrooge

HornetSaver wrote: »

Any advice on how long before applying for a mortgage I should start to consider not opening new accounts, or on how big a hit losing the 20 year relationship with a bank might have on my credit score?

Long relationships with banks are often regarded as a positive on credit histories. So whilst it might not make any difference. If keeping the account open isn't costing you anything I would keep it open and just close it after you have secured your mortgage.

HornetSaver

Hmm, makes sense. Will have to check the T&Cs of the old account, but in the distant past there were months on end with no payments coming out, and there were once two consecutive months where nothing went in, so I'm pretty sure I can keep that indefinitely. Might consider opening a third account sooner rather than later, even though there's almost zero financial gain to be had given that I have nothing to switch with. That way, at least if one of the newer accounts becomes less worthwhile I have something worth using whilst I ditch and switch the other. Alternatively, if I don't have cause to switch any of them, it will have been open that much longer by the time I apply for a mortgage.

But I guess my other concern with ditching and switching is this: if I were to ditch and switch from a bank due to the account going from being great (tailor made for my circumstances) to middle-of-the-road or worse (lower interest vs the market leader, loss of perks, no longer optimal for my circumstances), and then 12-24 months later discover that they had the best mortgage deal for my circumstances, wouldn't that be likely to hurt my chances of being approved? Even with a glowing reference from the credit agency, from the bank's point of view I would probably be considered a high flight risk - someone who has a track record of taking the least profitable part of the deal and switching as soon as things should start to get better for them? Do the general principles r.e. managing day-to-day money change somewhat when you're a certain distance away from obtaining a mortgage?