Opening Help to Buy ISA impacting credit rating?

aerie

I visited Lloyd's last week to convert my previous current account into a Club Lloyds. While I was there the adviser informed me that my lending rating was excellent (good enough to be accepted for a mortgage at the lowest rate), and that it might be worth applying for a trade on my student credit card (still have this despite having not been a student for several years) to one of Lloyd's 0% cards, and that I could continue to build credit rating even if I weren't to use this new card.

Today I returned to do this, but have now been rejected for this trade in application.
All I have done banking wise in the last week is open a Help to Buy ISA with Barclays. Can this have impacted my credit score and ability to apply for credit? If so, why is this since it is a savings account rather than having any borrowing facilities?

I'm struggling to understand how I can go from having a rating good enough for a mortgage to being rejected for a pretty standard credit card in a week!

In terms of my overall profile I barely use my student credit card and always pay it off in full, have a card with another provider that I always pay off in full. Have a steady decent paid job with a regular income that is more than my expenditure and also have significant savings. I'm just looking for the best ways to build my score

Candyapple

Firstly there is no such thing as a credit score, it is a fictional piece of marketing nonsense invented by credit reference agencies to keep mugs paying their £14.99 for a new score each month which no lender will ever see or use - only you. You could say it is as useful as a chocolate teapot.

What you need to be concentrating on is building your credit history.

Opening an ISA will have absolutely no bearing to your credit history. Savings accounts are neither credit checked or reported back to the agencies so the reason for your decline is something else.

What you need to do is check the free versions of all 3 of your credit files below:
Experian: https://www.moneysavingexpert.com/creditclub
Equifax: https://www.clearscore.com
Call Credit: https://www.noddle.co.uk

I'm surprised that Lloyds declined you for a second card. When you went into the branch, did they show you the screen which showed what card they would offer you and what your credit limit would be? If not, then you were advised wrongly because on their screens they can see everything you are eligible for.

Also, just because you were eligible for a mortgage with them, their departments all have different risk criteria. I have in the past asked to see what I was eligible for and it has been mortgage and credit card but the APR if I was to apply for a loan was quite high.

DCFC79

It looks like your doing the right things to improve your history.

The "lending rating" you mention is possibly an in house rating system the bank uses to rate you.

aerie

I didn't think opening the ISA would impact it.

Last week their systems were showing I would be eligible for a card, though they didn't show me the screen. When I returned this week to make the application this was no longer showing. I was told I could apply anyway and it may be referred to be checked in person, which I agreed to as I had already made the journey to the branch, assuming it would go through since the only thing that I am aware of that has changed since last week is this ISA.

I didn't actually ask for mortgage eligibility, rather the adviser stated my risk rating for Lloyd's was the best it could be and used this an example. He then suggested this credit card trade.

She wasn't very helpful about the reason for being rejected, only saying that there have been some recent credit searches showing in my history, which is why I thought perhaps the ISA application had done a search.
I have not applied for any 'hard' credit checks since opening my non Lloyd's credit card around a year ago. Clearscore is showing no recent changes and I am currently signing up for Noddle to check there too. (I can't progress with my CreditClub account as I can't seem to input address history on my current computer, I'll try with a different device later)

Candyapple

aerie wrote: »

I didn't think opening the ISA would impact it.

Last week their systems were showing I would be eligible for a card, though they didn't show me the screen. When I returned this week to make the application this was no longer showing. I was told I could apply anyway and it may be referred to be checked in person, which I agreed to as I had already made the journey to the branch, assuming it would go through since the only thing that I am aware of that has changed since last week is this ISA.

I didn't actually ask for mortgage eligibility, rather the adviser stated my risk rating for Lloyd's was the best it could be and used this an example. He then suggested this credit card trade.

She wasn't very helpful about the reason for being rejected, only saying that there have been some recent credit searches showing in my history, which is why I thought perhaps the ISA application had done a search.
I have not applied for any 'hard' credit checks since opening my non Lloyd's credit card around a year ago. Clearscore is showing no recent changes and I am currently signing up for Noddle to check there too. (I can't progress with my CreditClub account as I can't seem to input address history on my current computer, I'll try with a different device later)

This is a huge red flag. If you were no longer showing on their screens as being eligible for a card they should definitely have not told you to apply as it would have been a straight decline. Lloyds receives monthly feeds from the CRAs so something is on there that they did not like and therefore rescinded your eligibility for a card.

The bit you mentioned where the adviser said there had been some recent credit searches showing in your history - pray tell how she had access to your credit files? She would not have, is the answer and so was making up a !!!! and bull story to get rid of you.

Ben8282

The Student credit card is specifically excluded from the type of card which can be traded in or swapped for a different type of card. It is therefore unlikely that you were told it could be.
http://www.lloydsbank.com/credit-cards/existing-customer/swapping-your-credit-card.asp
It is very unlikely that you were told that by doing this you could 'continue to build your credit rating' even if you did not use the new card.
It is very unlikely that you were told that your internal credit rating with Lloyds was 'the best it could be'. You may have been told it was good, but the 'best it could be'? I don't think so.
The advisor may have said that you were eligible to apply for a mortgage but could hardly have given a decision.
As has already been said the advisor would not have access to your credit files and therefore could not have known about the recent searches.

cjmillsnun

The HTB ISA will have no bearing on how lenders view you. The search that was done on opening the HTB ISA would've been a soft search as an identity check for money laundering prevention purposes. Lenders wouldn't even know you opened the account.