Refused Student Bank Acc

sunny_p101

Hey All,
Please help me! Im stressed out and in the need of urgent advice!
I applied for a student bank account with natwest a week ago, called up a few days ago just to check its progress as advised by the bank staff and was told my application was rejected. He said he couldnt explain why but said something about my credit rating! I am a 19 year old, never been in debt, never missed payments, never taken out a loan or overdraft!! How could this happen to me? What can I do to resolve this issue? I start uni on the 17th and need an account open by then! Please help!
Cheers
SD

Gemmzie

Are you on the electoral role at your home address? Do you have any form of credit? A mobile phone contract?

sunny_p101

Im on the electoral roll definatley, and have only one mobile phone contract on my name. I have no part time job and studying full time. What could have caused this to happen? Its starting to make me worry

CLAPTON

i would suggest you obtain copies of your credit files from the three agencies asap just in case theres is some incorrect information on them.
I would also try phoning them again and asking if they can tell you why you were refused.

Do you already have a bank account of any sort?

sunny_p101

I've just signed up to experian for credit files, will get a pin no this weekend. Natwest told me they cannot disclose why they refused but did suggest to check my credit reports. I already hold current accounts in natwest, hsbc, nationwide, halifax and an ISA in abbey. Is this situation normal for a 19 year old??

rainbowtrout

I wouldn't be too worried as I got rejected for a Halifax student account some years ago (despite being in excellent financial health and never even USING my HSBC overdraft) and it's never caused me any trouble since, I've been able to get all the mobile phone contracts/credit cards etc.

You have to keep in mind two things:
A) no credit history is almost as bad as a bad credit history. i.e. if you are only 19 and have very few DIRECT DEBITS (e.g. utility bills with fixed address) going out in your name, banks will be reluctant to make a large sum of money available to you.

Banks make a loss on student accounts. They expect to make the money back from you when you graduate and begin to take out lucrative financial products e.g. graduate loans and mortgages with them. So it may actually make sense for them to decline you if your credit history is TOO GOOD and they judge you unlikely to take out Credit cards with giant APRs.

Also banks may decline you for holding a student bank account elsewhere.

I wouldn't worry about it, although get your credit files just in case. My bet is there's nothing on it and banks just declined you for some obscure reason in their complex money making algorithms. It is unlikely to affect your future financially-I certainly haven't found any problems since!

rainbowtrout

Also just thought of another thing--do you have lots of overdrafts set up on your current accounts with other banks? It certainly is unusual for a person of any age to have so many current accounts at once, and if you collective overdrafts is very high they may decline you on the grounds that you already have too much credit available to you (whether you actually use them or not).

sunny_p101

rainbowtrout, im on the same boat as you were! I originally opened a student account successfully with hsbc last year and had an overdraft facility available but didnt use it, actually didnt even touch the account or even deposit any money. Then when I tried to use it 9 months later hsbc said the acc was dormant and I had to build up a good number of transactions before the overdraft was avail again.
I do believe that I might have access to too much credit, what would be the best way to reduce my given amount?

rainbowtrout

Closing a couple of accounts you don't need might be the best bet. also cancel any credit cards (if you have them) that you are not using, because credit limits and overdrafts all count.
I'd just try elsewhere for a student bank account really, would be very surprised if you can't open one anywhere. You might not get the advertised overdraft limit but this is quite common (for example Halifax actually puts most people on 500pounds overdraft to start with and then review on your request, despite their claimed 2750 pound overdraft. I've yet to meet anyone who's got the whole 2750 pounds when they first apply!)

rainbowtrout

In fact if you have a dormant HSBC student account at the moment, why don't you call them up and negotiate for an overdraft. Offering to pay your student loan into their account usually gets their attention.

sunny_p101

I did try that option, they said I have to build up a number of transactions from that account before any overdraft can be reissued, which may take weeks to couple of months.