Impact of switching banks, regards to mortgage application later

OneLeggedPig

Hi all,

I’ve been looking but haven’t been able to find a conclusive answer for this- quite possibly there isn’t one. I thought it worth asking to get some advice.

My situation is this:
I want to switch current accounts to get a cash bonus. However I intend to apply for a mortgage next year (probably in 10-14 months time, currently saving).

I understand that switching banks and not having been with your bank very long has a small impact on Credit score or on the lender’s assessment of your reliability. So I don’t want to have a negative impact on that if it would affect the rate I will be offered for a mortgage.

How much of an issue do people think this would be? Am I right that it won’t appear on my report after 12 months?
Just to note:
- I switched accounts previously in March. Before that I hadn’t ever switched banks.

- I switched credit cards a few months ago- had previously never switched this.

- I am keen to get the switching bonus cash to pay off an overdraft of about £120 from a difficult month. It’s interest free but I don’t see when I will be able to pay it otherwise, as my budget is very tight and I am trying to maximise my use of the help-to-buy ISA (I know it’s name is now a joke, but I’ve agreed with my SO that we will each put in 200 p/month). However I won’t do it if it’s going to cause even slight issues down the line.

I know there might not be a definitive answer to this but advice would be appreciated. I’ve had a good look online including this site, and I can see that it isn’t a good idea to do multiple switches just before looking to borrow, but I haven’t been able to find out about if it is just one switch approximately a year before.

Thanks a lot everyone.

[Deleted User]

I wouldn't worry. Switching bank accounts isn't increasing your debt or available credit (apart from any small overdraft differences)

Your credit score may be impacted, but remember this doesn't reflect how a lender will view you - or is ever seen by anyone.

MallyGirl

given that you have only held the account for a short time it won't affect your future chances. If you had held the account for many years the advice might be different as lenders like to see stability

Nebulous2

It's always possible to open a second bank account switch that one and then keep them both. Lots of people on here have two (or more) current accounts for a range of benefits.

OneLeggedPig

Thanks everyone, that's re-assuring. I understand now that any "damage" done, which would be minimal, was already done when I switched away from my long-term bank at the start of the year.

This has eased my mind. I'm going to go ahead and do the switch in the next week or so.