Changing Bank Accounts - Possibly

GM1880

Hi,

After a little advice if possible?

I've had two Lloyds current accounts and a savings account for 16+ years. But I defaulted and got a CCJ for a Lloyds Credit card. The default has dropped off my credit file, but the CCJ from the DCA is on there for another 3 years. I have one other settled default which is also 3 years old.

I've been trying to rebuild by credit profile since and recently got myself a Barclaycard Platinum. Financially I'm very stable now aside from these historic issues.

My query is, will Lloyds have an internal red flag on my account given the old default on a credit card, even though it's over 6 years old and off my credit file. If so, they're unlikely to grant me future credit whether it be an overdraft/mortgage/loan. If so, then I'd have thought it would be worth switching my bank accounts elsewhere to start building new relationships with another bank.

The issue is then, with a CCJ and default, though settled, would i be struggling to get a current account with a new bank. But, would Barclays we worth a go given Barclaycard already approved me for a credit card, or is they not linked? First Direct have already said I'd not be eligible with a CCJ on file.

Kim_13

I would try Barclays.

Lloyds and Bank of Scotland and Halifax are all linked, so I'd avoid them. TSB shouldn't get any data from the LBG group any longer, but some posters experiences seem to indicate that this may not be the case, so I'd avoid them too.

You'll also want to avoid banks that are known to be picky about who they accept - First Direct fit into this category and are linked to HSBC and M&S.

Don80

GM1880 wrote: »

The issue is then, with a CCJ and default, though settled, would i be struggling to get a current account with a new bank. But, would Barclays we worth a go given Barclaycard already approved me for a credit card, or is they not linked? First Direct have already said I'd not be eligible with a CCJ on file.

Banks all do things differently. This is years ago, but my ex used to work for RBS, and told me that they have an internal scoring system. All customers are (or possibly were!) ranked on a 10 point scale. That score is affected by things like missing payments, how often you're overdrawn etc. That internal score would be their primary means of decision making on new applications - it allowed them to use your history with them as well as other information they had. It's confidential and when I asked, they wouldn't tell me what the score was though they acknowledged it existed.

Assuming all banks do something similar, Lloyds can take your history with them into account. If you want to stay with Lloyds, the best thing to do would be to simply ask them about this, or apply for a small overdraft to see if they approve it.

The other thing to consider is, when are you planning taking out a mortgage or loan? Lots of people take out loans and mortgages with providers they have no relationship with, so having an account may or may not be useful. If an account is required in order to get a better rate, you should be able to open that at the time?

MSE has an eligibility checker for loans and credit cards which would give you an idea now of how likely you are to be accepted. As your credit history improves, more and better options will open up.

I would imagine mortgages would be harder to predict unless you are planning this soon. It is likely that your best deal would not necessarily be with whoever your current bank would be. So I'm not sure switching bank for this reason now would be worthwhile.

However, starting afresh with a new bank may be a good idea if banks do use internal scoring systems. You could take advantage of switching bonuses for example. I agree with the person who said to avoid picky banks, however I don't think TSB should be a problem as they are now part of Sabadell and not LBG. Check out https://www.moneysavingexpert.com/banking/compare-best-bank-accounts

GM1880

Just applied for a Barclays current account, accepted. Which is nice.

Question now potentially, do I close down my Lloyds account?

I've now got:

Monzo current account - though not a proper account, but like their functionality.
Lloyds Current Account, plus a cash account for house bills and a savings account.
Barclays Current Account - NEW
Vanquis Credit Card
Barclaycard Platinum - NEW

To keep things simple, tempted to get shot of Lloyds altogether now. Leave the Vanquis open for the moment in case they up my credit limit before Barclaycard do.

Don't foresee the need to apply for credit for the next 6 months, but wonder if having added two new credit accounts recently, plus closing down by far my longest credit relationship right away would be too negative an impact on my credit history?