Multiple Current Accounts for Switch Bonuses - Affect on Credit Score

alex192

Good evening all,

I have a question regarding the effect that opening and switching several bank accounts will have on credit rating, and ultimately being able to secure a mortgage.

A quick background about my situation. I currently have a Santander 123 account which I have had for over 3 years, and use this for my main banking (salary and bills). I have recently switched my graduate NatWest account to a Halifax Reward Current Account (having paid off the overdraft etc.) and received the £100 switch bonus (very easy to do). Upon the advice of one of my friends I am thinking about creating several accounts and, in effect, switching to the 5 or 6 bank accounts that offer the switching bonus to get approx £800 switch bonuses, before closing those accounts once the minimum term has passed.

To do this I would keep my Santander 123 completely separate, and create some basic current accounts with Santander and Halifax solely for the purpose of switching them. Lets say I open 1 basic Santander account and 1 basic Halifax account, then switch both of these to (let's say) FirstDirect and HSBC. Once these switches have paid out the bonus (I would get around the direct debit/ funding requirements by setting up small direct debits for charities and setting up standing orders from my 123) I would then switch these accounts and repeat the process.

Inevitably (let's say 6 months time), I will have closed all of these accounts, still remaining with my Santander 123 and Halifax accounts, but will be £800 better off. Now my question is regarding the affect on credit scores. I understand that applying for lots of CC and most current accounts takes a temporary hit on your credit score. I would like to know if this would be problematic in the future. I currently have a good credit score and have a few cashback credit cards which I use for my spending (paying off in full). I aim to apply for a mortgage for my first house within the next 2 years, but I am worried that certain banks would not offer good rates if they can see on my credit score that I have at one point had a bank account with 6 or 7 of the main banks and then closed them down (obviously just to get the various bonueses). My biggest worry is that having 6 or 7 closed accounts from 6 or 7 different banks might arouse suspicion, especially if I plan to get a mortgage with one of the banks that I closed an account with to get the bonus.

Is it a bad idea to go out and get all the switching bonuses with regards to my credit score and the effect on securing a mortgage? I understand the amount of hassle it requires but I am quite savvy when it comes to things like this. Or would it be better to not open any more bank accounts or cards in the next 2 years to keep my credit score stable?

Thanks a lot for your time, Alex

With so many

grumbler

effect

alex192 wrote: »

I am thinking about creating several accounts and, in effect, switching to the 5 or 6 bank accounts that offer the switching bonus to get approx £800 switch bonuses, before closing those accounts once the minimum term has passed.

Why not to do this sequentially instead of simultaneously?

To do this I would keep my Santander 123 completely separate, and create some basic current accounts with Santander and Halifax solely for the purpose of switching them.

For Halifax see this recent thread: Halifax and BOS closing my accounts

Now my question is regarding the affect on credit scores. I understand that applying for lots of CC and most current accounts takes a temporary hit on your credit score. I would like to know if this would be problematic in the future. I currently have a good credit score and have a few cashback credit cards which I use for my spending (paying off in full). I aim to apply for a mortgage for my first house within the next 2 years, but I am worried that certain banks would not offer good rates if they can see on my credit score that I have at one point had a bank account with 6 or 7 of the main banks and then closed them down (obviously just to get the various bonueses). My biggest worry is that having 6 or 7 closed accounts from 6 or 7 different banks might arouse suspicion, especially if I plan to get a mortgage with one of the banks that I closed an account with to get the bonus.

I don't see how this can make any difference for a mortgage application, but theoretically it can if you apply for a current account.

Is it a bad idea to go out and get all the switching bonuses with regards to my credit score and the effect on securing a mortgage?

Not really.

Dan83

I'm no expert on credit score's and I don't understand why people worry about it so much, but I've seen some one on the telly saying it's ok, just calm down on the applications in the 6 months before you apply for a mortgage.

I don't see why having loads of accounts would harm your credit score, if your not in debt what's the problem? But like I said, I'm not an expert on it

DCFC79

Don't worry about impact on your credit score, lenders don't even see it.

MARTYM8`

As has been said I wouldn't worry about your score to much.

But it does make a difference. I applied for several current accounts about 12 months ago - when Yorkshire/Clydesdale had a very generous offer.

12 months has now elapsed since they were done and this month my clearscore credit score went up 60 points.

But it doesn't actually matter - albeit if you are about to apply for a mortgage I would not apply for lots of accounts/credit cards within 6 months of any application.

alex192

Thanks for the replies folks.

I think I will go for a couple of the switch bonuses now, and then hold off for a year or so before I apply for a mortgage.

I will also be aware of keeping my Halifax account active. I was originally planning on meeting the min criteria to get the £5 a month bonus, although I will pass a few transactions through it a month as I don't want my HTB ISA and Clarity CC to be cancelled.

I opened a Santander Basic bank account the other day, and have already set up 2 direct debits on it which are showing. When I come to switch this account to any other using the CASS, it asks to "Please enter your debit card number from the account you want to switch to us". However, because it is a basic account I only have a cash card and a pre-load Visa card (which also has a separate account number on online banking). Does anyone know how to successfully switch these basic accounts? I imagine I should enter the main bank account sort code and account number and then the card number from the Visa top-up card (not the cashcard). There is a box to tick if there is no Visa card, although I tried this and it wouldn't let me complete the CASS form. I'm kind of wishing I had opened a standard current account to do the switch and not a basic account.

Cheers!

grumbler

Can you not upgrade it to 'Everyday' before switching?

alex192

I will have a look. Reason I opted for the basic account is that I didn't want a credit check to be run and to show up on my credit file in case I was going to apply for a number of accounts this month to get the various bonuses. Funny, I have seen another thread where someone was not allowed to open a basic account as they were eligible for and already had a standard current account (I have a 123 account but it allowed me to open the basic account).

I may enquire about switching the basic account to TSB (I'm sure its possible to do so without first upgrading) although I may not ring Santander in case they ask why I plan on switching a few days after I have opened the account!

Candyapple

alex192 wrote: »

I will have a look. Reason I opted for the basic account is that I didn't want a credit check to be run and to show up on my credit file in case I was going to apply for a number of accounts this month to get the various bonuses. Funny, I have seen another thread where someone was not allowed to open a basic account as they were eligible for and already had a standard current account (I have a 123 account but it allowed me to open the basic account).

I may enquire about switching the basic account to TSB (I'm sure its possible to do so without first upgrading) although I may not ring Santander in case they ask why I plan on switching a few days after I have opened the account!

You should have just opened an 'Everyday' bank account with Santander from the start and not a basic one, especially given that you've got a 123 current account with them. I did just that and was not credit checked by them, card arrived 4 days later and the new account was showing in my online banking the same day.

All you can do now is call them and ask for the basic account to be upgraded to the 'Everyday' current account and then if they agree, to wait for the new debit card.