3 Current Accounts - good idea?

richmoore4071

Hi All,

I'm trying to spread my money out over a few current accounts to get the best rate of interest, but I've been told this can affect your credit rating.

I just did the free credit rating thing on Expedian - and its currently pretty high (926 out of 999) - but if I open another account will it affect it negatively?

best,

Rich x

[Deleted User]

Probably, but it doesn't matter, as your score doesn't mean anything and isn't seen or used by lenders.

No reason why lenders would be particularly concerned about current accounts.

john1002

Forget your score it means nothing in the real world. So your 926 will have no bearing on your applications, what will is a high number of factors that can include length of time in employment, time at address, income, debt ratio etc etc.

Who you apply to will have there own criteria.

Lots do the current account interest game, I'd apply for your best one and see how you go, 2-4 applications in any 6 month period would be best to work too, as with anything some will say more some less, if you start to get any declines then stop, take a 6 month minimum break and then start again.

Let the forum know how you get on.

John

DCFC79

richmoore4071 wrote: »

Hi All,

I'm trying to spread my money out over a few current accounts to get the best rate of interest, but I've been told this can affect your credit rating.

I just did the free credit rating thing on Expedian - and its currently pretty high (926 out of 999) - but if I open another account will it affect it negatively?

best,

Rich x

Your rating will be affected yes but no lender or banks can see it, only you can see it. An entry will be added to your history about the account.

stuart30

Sorry if this is off topic...but for those who say your "score" means nothing,i beg to differ.

If Mr A has credit score of 999 then theres a pretty good chance his over all credit file is healthy with his finical commitments being coverd.

If Mr B has a score of 100 then that would be a fair indication that his credit report is not very healthy at all...possible defaults/late payments etc etc.

Lets face it your hardly likely to have a very high score with defaults and ccj"s are you.

So does that not mean a high score is a indication your credit file is in fairly good shape.?

[Deleted User]

No. Bankrupts often have a 999 score, as do the very young and those with no credit history. Lenders would categorise those as high risk,

At best, it may give you a clue that something is wrong with your file if your score is very low, but that's about it.

stuart30

Deleted_User wrote: »

No. Bankrupts often have a 999 score, as do the very young and those with no credit history. Lenders would categorise those as high risk,

At best, it may give you a clue that something is wrong with your file if your score is very low, but that's about it.

So it does have some relevance then...:p

I do understand what people mean by its just a number,just wanted to make the point a very low score must indicate something a miss.

[Deleted User]

Not quite. It MAY indicate something is amiss.

MEM62

stuart30 wrote: »

Sorry if this is off topic...but for those who say your "score" means nothing,i beg to differ.

If Mr A has credit score of 999 then theres a pretty good chance his over all credit file is healthy with his finical commitments being coverd.

If Mr B has a score of 100 then that would be a fair indication that his credit report is not very healthy at all...possible defaults/late payments etc etc.

Lets face it your hardly likely to have a very high score with defaults and ccj"s are you.

So does that not mean a high score is a indication your credit file is in fairly good shape.?

That theory might hold water if the 'score' was not a randomly generated number. (Not to mention the fact that nobody outside the CRA and you ever sees it) Even the CRA's cannot tell you how they calculate it.

The data on your report is what is important. This what lenders take into account when taking a view on you. True, a CCJ will have a negative impact on your standing that is because they can see that you have a CCJ - not because it has had any influence on any mystical number.

Mulder00

stuart30 wrote: »

Sorry if this is off topic...but for those who say your "score" means nothing,i beg to differ.

If Mr A has credit score of 999 then theres a pretty good chance his over all credit file is healthy with his finical commitments being coverd.

If Mr B has a score of 100 then that would be a fair indication that his credit report is not very healthy at all...possible defaults/late payments etc etc.

Lets face it your hardly likely to have a very high score with defaults and ccj"s are you.

So does that not mean a high score is a indication your credit file is in fairly good shape.?

No, the issue is that the credit score as given doesn't reflect that different companies score differently. A good credit score is meaningless even if they were to use very exact criteria to calculate it.

For example:

A current account provider might have a credit scoring criteria which negatively views multiple current accounts (completely hypothetical of course). That means that opening an additional current account would be very bad news if you wanted to apply for a current account through this provider.

A mortgage lender might have a credit scoring criteria which positively views total available overdraft versus how much is used (completely hypothethical of course). That means that opening an additional current account would be great news if they also throw in a free overdraft which is unused if you wanted to apply for a mortgage through this provider.

So does an additional current account positively or negatively affect your credit score? A company which isn't going to offer you credit (e.g. Experian / Noddle / Clearscore) cannot really tell you because their criteria may very well be in conflict with that of other credit providers. And even if they used the credit scoring techniques of a mortgage lender, it may still be in conflict with the credit score you get through a mobile phone provider or even another mortgage lender.