Bank account that won't do a credit check on opening account?

BatchedMetting

Hi all,

I want to open a basic bank account with a debit card.

I just applied for a loan but was rejected so probably don't want another credit check on my file so soon?

I don't think I have a bad credit history, just not good enough for a loan if that makes sense.

So is there a bank account that I can open online that isn't going to do a credit check?

Or does it matter if they do a credit check, it goes on my file, but I pass the check?

Thanks

pmduk

Check the links at the top of this board for a basic bank account. They should be available to anyone unless they have a history of involvement in fraud. Personally, santander account has an unusual debit card and is best avoided imho.

Anthorn

BatchedMetting wrote: »

Hi all,

I want to open a basic bank account with a debit card.

I just applied for a loan but was rejected so probably don't want another credit check on my file so soon?

I don't think I have a bad credit history, just not good enough for a loan if that makes sense.

So is there a bank account that I can open online that isn't going to do a credit check?

Or does it matter if they do a credit check, it goes on my file, but I pass the check?

Thanks

Doesn't really apply. Banks do credit checks not really to catch you out but primarily to decide on whether you are a good candidate for upselling / cross-selling. Them finding bad entries is a bi-product, assuming that anyone with a credit history bad enough to cause a decline won't apply anyway.

There are hard searches and soft searches. Some banks and other lenders will do a soft search at first to decide on whether they can make you an offer and then a hard search if you choose to proceed with your application.

In theory they should not credit search if there is no credit element such as with a basic bank account but they do.

BatchedMetting

Ok, thanks.

So a credit check is unavoidable.

If I open a couple of bank accounts in relatively quick succession, my file will say "has done a few credit checks recently" which could be interpreted as bad by whoever looks at it next.

Don80

BatchedMetting wrote: »

Ok, thanks.

So a credit check is unavoidable.

If I open a couple of bank accounts in relatively quick succession, my file will say "has done a few credit checks recently" which could be interpreted as bad by whoever looks at it next.

Basic accounts don't credit check you - they do an ID check though. The issue is how you get one!

Most banks require you to apply for their standard account, and then they offer a basic account if you are unsuccessful. That's where the credit check comes in.

Nationwide and Santander allow you to apply directly for a basic account, so there should only be an ID check. Barclays also let you apply directly, though in branch only.

BatchedMetting

Thanks, that's great!

Anthorn

Don80 wrote: »

Basic accounts don't credit check you - they do an ID check though. The issue is how you get one!

Most banks require you to apply for their standard account, and then they offer a basic account if you are unsuccessful. That's where the credit check comes in.

Nationwide and Santander allow you to apply directly for a basic account, so there should only be an ID check. Barclays also let you apply directly, though in branch only.

Your post is a little confused. First you say they ID check but don't credit check and then you say you can't apply directly for a basic bank account, etc., etc.

Ergo you apply for a regular bank account, they credit check you and then you fail the credit check they offer you a basic bank account so they have credit checked you for a basic bank account! So where does an ID Check for a basic bank account come in when you can't apply for a basic bank account?

Probably the most honest in this respect is Virgin Money which offers the Essentials Current Account which is a basic Bank Account:

As part of your application, we will carry out a credit check to verify your identity. We accept applications from people with no credit history or a poor credit history, as the account has no overdraft facility.

https://uk.virginmoney.com/virgin/current-account/essential-current-account.jsp

Note that Virgin Money say "Credit Check" and not "ID Check".

Don80

Anthorn wrote: »

Your post is a little confused. First you say they ID check but don't credit check and then you say you can't apply directly for a basic bank account, etc., etc.

Ergo you apply for a regular bank account, they credit check you and then you fail the credit check they offer you a basic bank account so they have credit checked you for a basic bank account! So where does an ID Check for a basic bank account come in when you can't apply for a basic bank account?

Probably the most honest in this respect is Virgin Money which offers the Essentials Current Account which is a basic Bank Account:

https://uk.virginmoney.com/virgin/current-account/essential-current-account.jsp

Note that Virgin Money say "Credit Check" and not "ID Check".

Hi, sorry, it made sense in my head!

Credit reference agencies are used for two purposes. One is to check your identity, the other is to "credit check" you. When you apply for an account that doesn't involve credit (e.g. a savings account) they only ID check you. Credit reference agencies have records of your address as reported by banks, and the voters roll, and that is what they are looking at. A basic account is not a credit account, so for that they only need to ID check you - and that would still show on your credit file as "identification check".

You CAN apply directly for a basic account - e.g. Coop Bank, Nationwide, and Barclays (in branch only). Keep in mind that even they may have eligibility criteria (e.g. Nationwide say only if you are bankrupt or don't have another account).
http://www.moneysavingexpert.com/banking/basic-bank-accounts#best

Other banks don't offer basic accounts to people who are eligible for their regular accounts, so their process is that you have to apply for a normal account, and they only offer a basic account if you are rejected. Obviously a regular current account is a credit account (as there is a possibility of an overdraft) so you are fully credit checked for that. So technically the banks see it as credit checking for a normal account, not the basic account. As a customer, they're putting a step in between you going in to ask for a basic account, and actually opening one, and that means you cannot avoid a credit check.
For an example, see https://www.bankofscotland.co.uk/bankaccounts/compare-current-accounts/basic-account/

Essentially most banks don't want people having basic accounts, they would rather you had a normal current account. Basic accounts cost the bank money to run because they can't charge you for anything, but they still have to pay for your debit card, and the costs of processing your transactions etc. With normal accounts they partly offset these costs with the money raised from those who are in overdrafts or paying charges. That's why they put these "hurdles" in the way of opening basic accounts. They want to be sure that you actually "need" that kind of account.

I hope this makes more sense!

EarthBoy

Don80 wrote: »

You CAN apply directly for a basic account - e.g. Coop Bank, Nationwide, and Barclays (in branch only). Keep in mind that even they may have eligibility criteria (e.g. Nationwide say only if you are bankrupt or don't have another account).

Nationwide states that the basic account "is only available if you are not eligible for any of our other current accounts, you are bankrupt or don’t have a current account in the UK."

They need to credit check you, not just ID check you, in order to find out this information.

http://www.nationwide.co.uk/products/current-accounts/flexbasic/features-and-benefits

So, although you can apply for the basic account, you will still get credit checked. Otherwise, how would they know whether you qualified for one of their other current accounts etc.?

Similarly, Barclays states: "You could get this account if you don't qualify for one of our other accounts and/or you have no bank current account in the UK."

http://www.barclays.co.uk/current-accounts/basic-account/

They need to carry out a credit check to establish this.

Coop Bank says "Approval is based on an assessment of your personal circumstances. We may use Credit Reference Searches to validate your information."

http://www.co-operativebank.co.uk/currentaccounts/cashminder

How would they assess your personal circumstances without doing a credit check? An ID check alone wouldn't show anything about your personal circumstances.

System

Don80 wrote: »

Hi, sorry, it made sense in my head!

Credit reference agencies are used for two purposes. One is to check your identity, the other is to "credit check" you. When you apply for an account that doesn't involve credit (e.g. a savings account) they only ID check you. Credit reference agencies have records of your address as reported by banks, and the voters roll, and that is what they are looking at. A basic account is not a credit account, so for that they only need to ID check you - and that would still show on your credit file as "identification check".

You CAN apply directly for a basic account - e.g. Coop Bank, Nationwide, and Barclays (in branch only). Keep in mind that even they may have eligibility criteria (e.g. Nationwide say only if you are bankrupt or don't have another account).
http://www.moneysavingexpert.com/banking/basic-bank-accounts#best

Other banks don't offer basic accounts to people who are eligible for their regular accounts, so their process is that you have to apply for a normal account, and they only offer a basic account if you are rejected. Obviously a regular current account is a credit account (as there is a possibility of an overdraft) so you are fully credit checked for that. So technically the banks see it as credit checking for a normal account, not the basic account. As a customer, they're putting a step in between you going in to ask for a basic account, and actually opening one, and that means you cannot avoid a credit check.
For an example, see https://www.bankofscotland.co.uk/bankaccounts/compare-current-accounts/basic-account/

Essentially most banks don't want people having basic accounts, they would rather you had a normal current account. Basic accounts cost the bank money to run because they can't charge you for anything, but they still have to pay for your debit card, and the costs of processing your transactions etc. With normal accounts they partly offset these costs with the money raised from those who are in overdrafts or paying charges. That's why they put these "hurdles" in the way of opening basic accounts. They want to be sure that you actually "need" that kind of account.

I hope this makes more sense!

All new LBG current/basic accounts are subject to a credit check.
All mainstream providers also credit check.