Savings accounts & credit checks

Trixy

Hello

Do all banks carry out hard credit checks when you apply for a savings account? I applied to the co-op for an instant access savings account & was declined. The letter I've received suggested they carried out a hard credit check & when I called them to ask they said this was normal practice for all financial institutions. Surely this can't be right? They are not providing & I'm not asking for any credit...I just want somewhere I can save money!

I did have a bankruptcy but that is now over 6 years ago & doesn't show on my Equifax record anymore.

Any suggestions on a savings account that doesn't require a hard credit check would be much appreciated.

Thanks in advance.

Rich2808

You may get a soft credit check to confirm your ID but it won't be visible to other lenders. In other words nothing to worry about.

Only if you enter into a credit agreement - Loan, mortgage, current account and credit card etc will they do a hard credit check.

Trixy

Thank you.

I expected a soft check but they confirmed they carried out a hard check. I only applied for a savings account not a credit facility but they still did a hard check & told me all banks do it!

ColdIron

Can you see it on Equifax?

Trixy

I am waiting on my monthly Equifax report. However, bank confirmed it to me verbally the above. I just don't want lots of searches on my record when I'm only applying for a savings account.

EachPenny

Maybe the person you spoke to didn't appreciate the difference between hard and soft checks and was just telling you that it was standard practice for a 'credit check' to be carried out?

I've had lots of checks made when opening savings accounts, but as far as I can tell none of them have been hard checks.

The bigger issue is why were you declined if the bankruptcy is that old?

Trixy

Indeed that was my issue.

I know the bank use Experian so maybe they haven't updated their records yet but I know it's definitely not showing on my Equifax record.

dunstonh

Unless the account has credit facilities or is linked to one that is, then you would not expect a hard check. You would expect a soft check.

In these days where the lines between savings and current can crossover (an account could have credit facilities without you using it for that purpose)

Trixy

It was an instant access savings account with no credit facility.

So are there any banks who provide a savings account for people trying to improve their finances. I just want to be able to save for a rainy day!

EachPenny

Trixy wrote: »

So are there any banks who provide a savings account for people trying to improve their finances. I just want to be able to save for a rainy day!

Yes, there are lots of them

Many of the best rates are either from current accounts or regular savings accounts linked to current accounts. You should probably avoid them until your credit history is completely clear.

I'd suggest you try the Virgin Money regular saver paying 2.25% if you can manage to pay in between £1 and £250 per month. This account allows you to withdraw money if you have an emergency, but you cannot put it back in the same month.

Alternatively Ford Money are starting a 4% regular saver from Monday. You could also set up one of their Flexible Saver accounts today (it pays 1%) if you have more money to save at the moment than the maximum monthly pay-in of £250. These accounts will need a UK current account to link to for withdrawing money - so long as you have at least a basic current account you should be fine.

You may want to wait a month or so for the bankruptcy to fully clear before trying to open any new accounts, but your experience with Co-op shouldn't be representative of what you find elsewhere.

Congratulations on getting to the end of what must have been a difficult time for you. You are absolutely doing the right thing by starting to look at saving money and if you can afford it, a regular saving account is a great way to get you into the habit of putting a little aside each month. Good luck for your financial future

Trixy

Thank you very much EachPenny!

Yes it's been difficult but we're at the end of it & trying to get back on an even footing!

I'll have a look at these accounts you've mentioned.

Thanks again.