Does switching bank accounts affect credit score?

sophlady

I've been following Martin's advice and switching banks to get the best deals. But then when I used the credit check tool, it said 'my relationships with banks are typically short' which affected my credit rating.
Anyone know whether switching banks has an affect on credit rating? I would have thought Martin would have mentioned it if so...

Chapuys

Credit scores do not matter, its how you use the accounts that matter. Anyway, to answer your question. Yes. It will have an effect. I think my Experian recently fell from 973 to 941 or something when I opened a new account as it will credit check you. Four months later, and having opened and snoozed on a credit card, it is back to 973. That shows it doesn't matter about the score, its usage.

Martin does mention that having a relationship with banks helps your credit file. I have a bank account plus overdraft with the Halifax I opened in 2002 which I do not use as well a credit card with a horrid APR at £0 from 2009 (which I drip spend then pay off). I do have much newer accounts, my current account is from March 2017. However, my credit report states:

"You've held a lot of your credit accounts for a long time. Stable relationships are seen as good - well done. Having said that, don't be too scared of switching if there are better deals out there. That's the point of having a good credit score – it enables you to apply for better and cheaper products."

If you really care about the score, do the same. Keep your longest account dormant and it will keep reporting on your credit report. Just don't be tempted to use it.

datlex

Yes it does effect your credit score but then again so does changing mobile phone provider. They are new accounts. Credit scores are not clever enough to identify additional credit as opposed to replacement accounts. They also don't understand that people may have multiple accounts for rewards benefits without using the OD facilities.