Current Account applications causing negative score

Geranium27

Hi


I recently inherited some money and am putting a fair chunk (around £40k) into the high interest paying current accounts, using the 5% savings loophole.
With the 1st 4 accounts I opened all was well, but when I went to open the 5th (with Lloyds) I got refused. I applied online & no reason was given other than the contact details of Experian etc, so I assumed it was due to my credit rating.

So I have now discovered that despite the fact I am using the accounts for savings & have ticked the 'no' box on the 'do you want an overdraft'? question during application. They have still run the credit check as if I were applying for credit. I mean I understand that a current account CAN have an overdraft facility, but surely that's not automatic?
It seems pretty unfair that I now have negative scores on my Experian rating, when I wasn't applying for credit at all. I just want to put my money into current, rather than savings accounts.

I suppose there's not much to be done about that except wait 6mnths for the negative score factor to time out.

Surely the banks ought to make a distinction between applying for a loan/overdraft & simply opening an account whch they may, or may not then chose to offer you an overdraft on.

Just wondering if anyone else has come across this anomaly & what they did about it? if anything


thanks

[Deleted User]

Geranium27 wrote: »

Surely the banks ought to make a distinction between applying for a loan/overdraft & simply opening an account whch they may, or may not then chose to offer you an overdraft on.

The banks do. But the CRAs don't. They just apply the normal approach of 'something's changed on your credit report, knock a few points off.'

You can safely ignore the number.

Geranium27

Thanks so it's the CRAs at fault then.


I would ignore it, but I now have £20k that I want to put in to 4 new current accounts so I can get the decent interest rate - 1 Lloyds, 1 TSB & 2 extra with the BOS(I just opened my 1st one with them), & Lloyds at least have just refused me (I assume) based on the fact that my rating is now only 'fair' rather than 'good'.
Experian say the checks made for the 1st wont clear/stop being a 'negative score' for 6mnths, so it looks like I will have to wait until then to open the new accounts :-/


It's infuriating.


I also have a negative score factor because I've never had any debt which I've paid off, because I've never had any debt.

[Deleted User]

Geranium27 wrote: »

Experian say the checks made for the 1st wont clear/stop being a 'negative score' for 6mnths, so it looks like I will have to wait until then to open the new accounts :-/

That is Experian's view - but they're not the ones lending you money.

Lenders will take their own view on which searches, and how many, would cause them concern.

All you need to do is check the data is correct and stop worrying about what some third party thinks of it.

Geranium27

Deleted_User wrote: »

That is Experian's view - but they're not the ones lending you money.

Lenders will take their own view on which searches, and how many, would cause them concern.

All you need to do is check the data is correct and stop worrying about what some third party thinks of it.

Well i'm not worrying what some 3rd party thinks of it, I couldn't care less what their opinion is, but Lloyds has already turned me down based on their (Experian's) rating, so I was wondering what to do about it, -if there WAS anything I could do about it.


My particular concern is that I want to keep applying for more of these high interest current accounts, but if they are already refusing me based on Experian's view, then don't I need to wait until that view changes before I apply for any more? or risk it getting even worse when I get refused again?


Or am I misunderstanding how these things work? my understanding is that a lender will ask Experian for their rating & then decide (if that rating is not high enough) to say no. Surely the lender doesn't look at the fine details of every item on a persons credit file... ie each credit check that's been made, by whom, what for, how many etc etc?
Or do they?

[Deleted User]

They don't ask Experian for their rating, they don't see the score from Experian, they don't care about Experian's opinion. In short, the Experian score is a fictitious crock of leprechaun poop.

Lenders will only look at the data on your file and make a decision on that.

gingercordial

Even if you don't apply for an overdraft facility, a current account (if not a basic one) gives you the ability to run up an unauthorised overdraft and hence represents a "risk".

A real savings account does not allow you to go overdrawn. Lenders can't see from your credit files that you are using these current accounts as ersatz savings accounts. To them you have applied for many accounts with the potential for debt.

At the latest count I have 13 current accounts in order to access higher interest rates/rewards and I have had to pause between applications from time to time as too many in one go get rejected.

Geranium27

Deleted_User wrote: »

They don't ask Experian for their rating, they don't see the score from Experian, they don't care about Experian's opinion. In short, the Experian score is a fictitious crock of leprechaun poop.

Lenders will only look at the data on your file and make a decision on that.

hahaha that made me laugh thank you. Then it's all a bit misleading really isn't it. Thank you for that it much clearer now.

27col

Geranium27 wrote: »

hahaha that made me laugh thank you. Then it's all a bit misleading really isn't it. Thank you for that it much clearer now.

Of course it's misleading. Experian are trying to sell you something that you don't need.

Geranium27

gingercordial wrote: »

Even if you don't apply for an overdraft facility, a current account (if not a basic one) gives you the ability to run up an unauthorised overdraft and hence represents a "risk".
.

thanks that makes more sense now. I'd not realised about the unauthorised overdraft.


I want to do the same as you with the current accounts, I planning on having 8. But I made the mistake of opening 1 in October & then 4 in the last 3 wks, so it makes sense why Lloyds refused me yesterday.
I know you cant be certain, but how long would you estimate as a reasonable time to pause before trying again. I mean a month? 3? 6? What was your experience

Geranium27

27col wrote: »

Of course it's misleading. Experian are trying to sell you something that you don't need.

yeah cheeky sods. I was wise to all the other cobblers they try & tell you you need & was certainly planning on ditching them before the end of my free trial, but I hadn't realised that lenders don't pay any attention to their score, I thought that's what they were basing their decisions on.
A lesson learned thank you.