Rejected for current acct switch ?

Abdabs

:beer::beer: Just checking we are doing the right thing....

Listened to Martin, and after thirty five years with a high street bank decided to switch to a high street Building Society. Husband was dragged to my bank twelve years ago, so we wanted to move to a recommended account, jointly. With current bank we are overdrawn slightly each month (£100) have a 5k overdraft limit, pay for a packaged account, and have other savings accounts with the bank (making no interest essentially)

After an hour in branch going through what we thought were the motions (surely we thought we are a safe bet...large amount of equality in home, small mortgage, several credit cards paid off each month for over a decade...what could go wrong) we were rejected for a small overdraft facility. Curtains.
At the time the woman was vague, though the rejection came after she carried out the credit score. She said she had no details. Since we are older than the hills ..well early 50s...we hadn't ever been through one (we mortgaged before they used agencies, and don't borrow money)

On return home we checked and there a problem with my ID which we are now chasing with credit agency. The Building Society themselves are saying now that they can't see any problem with us having a small overdraft, and in fact even though I have no salary, I could have an overdraft on my fairly dormant current account I already have with them right now!

Questions...
Is it possible that the fact we don't have debt and pay off everything bad?
We want to move houseyear and remortgage, so should we be borrowing money for something now as we are worried thy won't let us increase it even slightly?

The Building Society are being vague, and contradictory, and we are left bruised, confused and bemused.

(Also, , thinking its unsurprising that the country is in hock up to its ears when the financial services sector appears to 'reward' overspending not thrift! Discuss!)

takman

Well firstly you say you don't have debt but you have a mortgage, credit cards and an overdraft which you all regularly owe money on. So you do have debt.


Going overdrawn each month will look like you are in financial difficulty and is a sign of poor money managment. So this is likely going to against you when applying for a new account. Why are you going overdrawn every month if you have savings??.


So if you organise your finances better you won't need an overdraft at all so you can still switch your account. But it's not a very good idea to only have accounts with one bank, so keep one with your current bank atleast.


The first thing you need to do is to check your credit reports with the three main credit reference agencies in the UK. You need to make sure all your information is correct and is showing on your reports.


http://www.moneysavingexpert.com/loans/check-free-credit-report


You then need to look at the bank account guides and see where the best place to put your savings are:


http://www.moneysavingexpert.com/banking/compare-best-bank-accounts


Depending on your level of savings then you could be loosing thousands of pounds a year in interest!.

colsten

All banks can turn you down without giving you a reason.

There may be something on your credit files that they didn't like; worth checking. Being in constant overdraft certainly doesn't help.

Abdabs

Thanks.

Not in constan overdraft. Have fee free overdraft and dip slightly ( £30 to £100) into OD some months only but not most. Since fee free and charge free, never been an issue. And actually mostly slip savings in to cover it nowadays. Credit card is always paid off at end of month and has been all my life.

Some savings are against the mortgage ie. in a draw down facility, so paying less interest on that. Rest of savings in Stocks and Shares ISAs where they are at last doing quite well, though can go up as well as down..etc.

Don't think we are financially stupid, more that the goalposts are not clear. Reading Martins advice on this he admits it's a very hazy area. i know banks can turn you down without any reason, but im looking for someone who can hazard a guess? Especially if it's something we can change. Will take your point in OD but it's tiny and rare!

Thanks

agrinnall

As takman and colsten say, your first action should be to check your credit files, to see if they are accurate, and if they are and there is something negative recorded you can try to mitigate that.