How many new bank accounts is too many?

lupine79

Hi there. Any advice on the following scenario is much appreciated

I recently switched my Santander 123 account due to the rate drop, opening 2 accounts with Nationwide (Flex Direct and Flex Regular Saver) and a Bank of Scotland Vantage. I also opened a regular saver with First Direct (not sure if this will show up on my file?)

Now I still have some money left over that isn't earning interest, and ideally I'd like to open TWO more BoS Vantage and maybe a tesco current account.

I joined the MSE Credit club and have a high 'good' rating, but on the breakdown I have a neutral face showing for my credit searches (that is not, smiling, not frowning!). This I assume is due to the multiple new accounts opened.

Now, I may need all my funds and the best credit rating I can muster by Aug/September time when it looks like I'll be moving house and possibly buying. My questions are these:

Is it worth opening these new accounts to get the extra interest? (Financially it is worth it, but if my record can't recover in time then I perhaps need to reconsider).

Is it true that credit searches fall off within a year? Is is a strict 12 months? Because I could be looking for a joint mortgage in under 12 months.

Is that Smiley face likely to turn frowny with 1,2 3 more searches? Is it that exact a science?! (I'm guessing not!)

How ridiculous that trying to be savvy regarding substantial savings (which demonstrates you are somewhat careful anyway!) can get you into a pickle. By the way, none of the new accounts have overdraft facilities - I deliberately chose not to have them as I don't need them.

JimmyTheWig

No-one knows for sure.
Assuming that the interested earned on two or three more accounts is insignificant compared with what it would cost you if it meant you lost the best mortgage deal I'd say don't bother.

Stevie_Palimo

It is a bit like the lottery with credit searches to be honest.

lupine79

JimmyTheWig wrote: »

No-one knows for sure.
Assuming that the interested earned on two or three more accounts is insignificant compared with what it would cost you if it meant you lost the best mortgage deal I'd say don't bother.

Well, it'd be around £400 over 12 months for opening 3 more accounts (two of which are with the same provider). Not insignificant, but definitely not worth getting penalised for.

TheShape

I've been asking myself the same question. I've opened 13 current accounts since June including 4 this weekend just gone. I've also applied for two Credit Cards in that time, all accepted. There's also an ongoing HSBC application.

I don't have any pressing need for new credit in the future but I'd be interested to see if HSBC offers an overdraft as I think one might be applied for automatically with the Advance Account.

I have overdrafts on some but not all of the accounts which I think is a sensible move on your part to not have lots of available credit.

Your credit 'score' will take a knock but that's just reflecting all the applications rather things like missed payments etc which is what your mortgage provider will be most interested in. My ClearScore 'credit 'score' is in free fall but my credit file(s) looks (imho) very healthy.

lupine79

TheShape wrote: »

Your credit 'score' will take a knock but that's just reflecting all the applications rather things like missed payments etc which is what your mortgage provider will be most interested in.

See that's the thing...I have a couple of credit cards and they're paid off in full every month, without fail. No other loans (apart from student loan ), so I'm not risky per se, but MSE Credit Club says you look desperate if you open too many accounts in a short space. I'm wondering, do i do it now - take the hit, open 2/3 others - to give me more time to heal? Even though £400 ain't worth losing sleep over, I hate the fact that it COULD be earning interest but ain't. Any prospective mortgage application is 10 months minimum off...

TheShape

I'm no expert but I think what makes you look desperate is applying for lots of credit in the form of overdrafts, credit cards, loans etc rather than just current accounts.

With 10 months until a mortgage application it's now or wait until after the mortgage. Those two extra BOS accounts are at least not a new organisation if that makes a difference. I wonder if a full credit search is still performed if you're not applying for an overdraft?

lupine79

Indeed...it's such a mysterious mechanism, nobody seems to quite know how it actually works or how we'll be affected...and yet, it has a (potentially) massive bearing on our lives. I just want to earn what I can while I can, like Martin recommends!!!

Helvetica_Van_Buren

I've just opened my 7th current account and everything's just fine and dandy.

Thankfully credit scores are worthless so I only look at the factual information on my credit reports and as long as that's all correct, I'm happy.

Candyapple

Both Experian and Equifax keep searches for 1 year. Call Credit keep searches for 2 years. They are strict about these so any searches will be removed to the day exactly after 1 or 2 years (depending on which CRA).

Savings account don’t incur a credit check and also won’t show up on any of your credit files. So essentially you only have 2 hard searches on your file (Nationwide and BOS current accounts).

Will you be starting your home search around Aug/Sept time, or do you want to be completed by then? Don’t forget that it will take time to find a property and then go through the whole process until completion which in itself may take up to another couple of months, if not longer, so your actual mortgage application hard search may not go in until this time next year.

TheShape wrote: »

I wonder if a full credit search is still performed if you're not applying for an overdraft?

Yes they still carry out a full search. All current accounts I have applied for this year have been requested with no overdraft and all have had a hard search done.

Fireflyaway

Not sure about the impact on a credit score but why do you need so many accounts? I have a current account for bills, a spending account for fun stuff and a savings account. Why are you spreading it about isn't that confusing? I guess so long as they don't have overdrafts its fine.