Bank Loyalty

cuuladh

Hi, I am tempted to switch bank to avail of free cash but does that affect getting credit in the future for example if I want to switch my mortgage in 2 years time?

Browntoa

No , not in the slightest

cuuladh

why do credit applications ask how long with present back then?

Zero_Sum

Or just open a 2nd account & use that to switch.
Its always good to have at least 1 backup account anyway.

ozaz

Browntoa wrote: »

No , not in the slightest

Are there not positives (from a credit-worthiness perspective) to having at least one long standing bank account? I've assumed that it is worth keeping at least one long-standing account.

[Deleted User]

Very little.

Browntoa

It has no effect , you are not applying for credit , purely swapping banks.

They are only interested in total debt and recent application for further credit or missed payments

colsten

Browntoa wrote: »

It has no effect , you are not applying for credit , purely swapping banks.

They are only interested in total debt and recent application for further credit or missed payments

ozaz wrote:

Are there not positives (from a credit-worthiness perspective) to having at least one long standing bank account? I've assumed that it is worth keeping at least one long-standing account.

Bottom line, I totally agree that a current account switch now has zero impact on a re-mortgage application in 2 years time. A bit more background might be useful for the OP, though.

A current account application is an application for credit (due to overdraft facilities available, at least in theory) and entails a full credit check which will be recorded on your credit file, just like an application for a loan or a credit card would. This search will have disappeared from the credit file after 12 months, and most lenders wouldn't worry too much about searches older than 6 months anyway.

What might have an effect on future applications is if the account was a long-standing account and if it is the only long-standing one. Lenders are looking for the long-term ability (or otherwise) of an applicant to manage their finances. In the case of the OP, though, the current account isn't the only long-standing account, as they are talking about re-mortgaging in 2 years time. A lender will therefore see several years of mortgage history, and possibly also some credit card and mobile phone history. In addition, they will be able to see any closed accounts, so they would see the old current account if they looked for it.

I'd probably still agree with the suggestion to switch a different account, not the main current account, even if that means first setting up a donor account. This is simply for the reason that some current account providers might offer some preferential terms to long-standing customers. I can only think of very few banks and building societies who do offer any loyalty-type terms, and they are not always anything to get excited about. In addition, it is also a very good idea to hold [money in] more than one current account, just in case there are any issues with one of the providers (ref the Natwest/RBS/Ulster and TSB disasters, and some less severe incidences at others, like Tesco).


Recommendation to the OP: switch away at your heart's content!