Switching current accounts - hit on credit rating?

bitsandpieces

I'll be looking for a mortgage in the foreseeable future, but this could be a good year or two. It's very tempting to take up some of the cash offers floating around for current account switches, in the meantime - but how much will these hurt my credit rating/affect my prospects?

I'll be buying with about 50%+ deposit - so should be able to get a mortgage of some sort (barring very major changes in the mortgage market) but of course it would be daft to take the odd hundred for current account switches if this lands me with a much more costly mortgage. The only issues on my current credit file will be two missed credit card payments (under £50 total) in early 2014, just due to me stupidly messing up direct debits.

DCFC79

Disregard your credit rating as lenders don't see it, the raw data is what lenders can see and what they are concerned with.

bitsandpieces

DCFC79 wrote: »

Disregard your credit rating as lenders don't see it, the raw data is what lenders can see and what they are concerned with.

Good point. What I meant to ask is whether having additional searches on my file (from opening current accounts) would be likely to cause me problems.

[Deleted User]

Not for current accounts, and certainly not in a year or so.

bitsandpieces

Thanks - useful to know!

bitsandpieces

Thanks for the help with this - I've now done this once, and may be looking for a mortgage fairly soon.

It's tempting to open a new current account and then do another switch - it is easy money! but would the additional two searches on my file be likely to be an issue?

Superscrooge

Switching accounts is unlikely to cause any problem if your mortgage application is more than a year away.

Try and avoid lots of credit checks and new accounts during the six months before your mortgage application

One of the things lenders like to see is stability.

bitsandpieces

Thanks. I may well be applying within 6 months (albeit with a large deposit). Best to hold off on current account applications for now, then?

GingerBob_3

bitsandpieces wrote: »

Thanks. I may well be applying within 6 months (albeit with a large deposit). Best to hold off on current account applications for now, then?

Yes, because as far as I know, all the lender will see is that you've been hit with a search. He could then assume anything. He will not see who hit you with the search, nor whether it was related to a simple non-credit issue like changing your utility provider, or opening a new current account. To be on the safe side (from his perspective) he may well assume you've been repeatedly applying for a large loan. At least, I think this is how it works, but you may struggle to find source-based evidence to confirm this.