Current Accounts

soapy17

Good evening,

I've been making a complicated plan for how I could set up lots of new current accounts to take advantage of offers for new customers. I've been with Halifax my entire life and have only just taken an interest in managing my finances properly recently so I've got lots of options.

While doing my research I found out that opening lots of accounts in a short period of time could negatively impact your credit score. I've only just ordered my first credit card (it hasn't even arrived yet) so my credit score, as far as I'm aware, is pretty much just me paying my monthly contract on my phone bill for a few years. Until recently that was my only direct debit set up, I've got a student account overdraft set up which I've never really used except when messing about moving money between my accounts (never spent my way into it).

Considering I've got so little credit history going on, can I actually do any damage to my credit score when there isn't really anything there?

I also read that the issue of opening lots of accounts at once is that on paper it looks like you are desperate. I don't need to set these accounts up and I'm not about to start applying for a mortgage or anything so even if I did open several accounts up, would my score recover pretty rapidly?

If doing this is a terrible idea, what would anyone recommend as my first account to open and how long a gap should you leave before opening another one?

Sorry for posting such a long question and thanks in advance for any help.

enthusiasticsaver

If you are not applying for overdrafts I cannot see why it should be a problem. Why not try for a Tesco current account? 3% interest up to £3k and no need. To regularly fund it or set up direct debits. Take it from there.

Eco_Miser

My understanding is that opening current accounts without an overdraft has little effect beyond 6 months and none after a year.
My first choice would be the Nationwide Flexdirect and Flexclusive Regular Saver, earning 5% for a year, and a reward if introduced (I'm sure there are people on the referrals board who would be happy to help if you don't know anyone with this account).

colsten

Agree with previous responses, and would add that you need to keep a record right from the start about your accounts, and update that record regularly. You can do this on paper, on a spreadsheet you create yourself, or use a ready-made "spreadsheet" such as Microsoft Money or AceMoney.

darkidoe

If it helps, I have recently opened 2x BOS current accounts, 1x Tesco current account, 1x Tesco Savings account, 1x M&S current account within 2 weeks with no issues. I avoided applying for any overdraft as I don't need it.

It is much more useful to talk in terms of credit history rather than score, listing your positive factors e.g. (long standing Mobile contract), No defaults, history of current account, electoral roll registered etc vs your negative factors: recent credit search, new credit card with minimum history. Every credit/banking decision you make might come under the positive or negative list. If you sit tight long enough, time is usually sides with the positive factors.

The only way to know if you pass their eligibility criteria is to try applying for it and if you fail, you can always ask them why before deciding when it is suitable to try again. Then give it some time to build some history before doing anything major again.

Good luck with your set up and welcome to the MSE world!

NoodleDoodleMan

The Bank of Scotland VANTAGE current account looks a good deal, as recommended by MSE - 3% interest on the top band balance up to £5,000.......although NO interest above that amount.

You'd need to transfer any added interest taking you above the five grand mark as soon as possible after it is credited to the account.

Essentially it's a basic current account with their Vantage status added on - and you must remember to add on the Vantage option at the appropriate stage during the online application, or over the 'phone.

The key "must know" clauses are that it needs to be funded with a minimum £1,000 monthly, with a minimum of two direct debits monthly.

The DD requirement is easy enough to meet with a nominal £1 taken off - I have a Tesco Online Internet Saver (single and joint) for this purpose, other options available if you investigate.

The monthly £1000 can be switched in and out between bank accounts using standing orders - and, from what MSE indicate it can be done internally with BoS accounts - just ensure there is a day or two time delay from one to the other and back again.

That is surprising - as far as I know, banks do not usually allow internal transfers to satisfy regular funding conditions, it must be from an external source.........sounds sort of incestious !!!

It appears BoS also allows up to three such Vantage accounts per customer, so you could set up a rolling cycle of standing orders between these accounts to meet all the monthly funding criteria without having to pull in funds from elsewhere.

Does anybody have these BoS Vantage account(s) - and can they be "self funded" as above ?

xylophone

I have three BOS accounts which fund each other by means of internal SO.

NoodleDoodleMan

Jings - that was a quick reply !!!

Thanks.

I called BoS - you can have up to three accounts, any combination of single or/and joint, all internally funded by standing order.

bigfreddiel

Don't bother with this just for 3% on lots of piddling amounts of money, equity ISA is the only way to build up a nice sum for the future.

Of course you must have equivalent of six months salary to hand so that is when you use these accounts for a handy 3%

xylophone

Sorry for posting such a long question and thanks in advance for any help.

How much money do you wish to hold on an instant access basis?

NoodleDoodleMan

I didn't get this bit right, clearly misunderstood MSE explanation.

The Bank of Scotland VANTAGE current account looks a good deal, as recommended by MSE - 3% interest on the top band balance up to £5,000.......although NO interest above that amount.

You'd need to transfer any added interest taking you above the five grand mark as soon as possible after it is credited to the account.

If your balance goes above £5,000 you still get 3% on the five grand - but nothing above that plateau.

Apologies.