How long does a bank remember bad debt?

Willing2Learn

I defaulted a NatWest current account overdraft in 2010. I subsequently satisfied the debt in 2011 and the debt dropped off my credit files in 2016.

Yesterday, I tried to apply for a NatWest Select Account for the £150 switch incentive. The application was declined as soon as I entered my name and address. Never even got to enter income and expenditure. And definitely no credit check was done. I have a clean credit history on my credit files. No late payments, missing payments, no defaults, CJJ, AP or CIFAS markers.


Just wondering how long they hold a bad debt against you and when will it be forgotten.

MovingForwards

It may not be the bad debt which caused the decline, it may be the fact you had a current account previously. Read the t&cs

lindens

Are you on the electoral roll?

Willing2Learn

MovingForwards wrote: »

It may not be the bad debt which caused the decline, it may be the fact you had a current account previously. Read the t&cs

I checked the t&c before making the application and I satisfied the conditions.

lindens wrote: »

Are you on the electoral roll?

Yup - continuously since 2004 from the same address.

badger09

Willing2Learn wrote: »

I defaulted a NatWest current account overdraft in 2010. I subsequently satisfied the debt in 2011 and the debt dropped off my credit files in 2016.

Yesterday, I tried to apply for a NatWest Select Account for the £150 switch incentive. The application was declined as soon as I entered my name and address. Never even got to enter income and expenditure. And definitely no credit check was done. I have a clean credit history on my credit files. No late payments, missing payments, no defaults, CJJ, AP or CIFAS markers.


Just wondering how long they hold a bad debt against you and when will it be forgotten.

Banks are entitled to decide who they accept as customers (subject to anti discrimination legislation). If they decide they don’t want anyone who has previously defaulted with them, there is little you can do.

You could try appealing against the decision, but why bother? There are several other banks offering switch incentives.

NewToTheUkAgain

Similar to a recent post about someone with an Amex.

Have you tried putting your details in without a switch, to see how far the application gets too?

Maybe there not willing to offer the incentives for people that owed them money previously

Willing2Learn

badger09 wrote: »

Banks are entitled to decide who they accept as customers (subject to anti discrimination legislation). If they decide they don’t want anyone who has previously defaulted with them, there is little you can do.

Oh yeah - I fully appreciate that banks have the right to set the criteria and policies for deciding who is or is not eligible to be a customer. I was hoping that someone in MSE-land can tell me how many years they look back at. I am assuming it is not a lifetime exclusion and that there is a policy setting out the timescale.

societys_child

I was hoping that someone in MSE-land can tell me how many years they look back at.

Each bank will have different criteria, doubt they make it public.

colsten

Your credit files will contain closed accounts going back ages and ages. Whether a bank uses the old information or not is entirely up to them. It's also up to them whether they exclude anyone for life. They must, however, provide almost everybody with a basic account if the applicant does not qualify for a 'normal' account (EU legislation). https://www.moneyadviceservice.org.uk/en/articles/basic-bank-accounts

badger09

colsten wrote: »

Your credit files will contain closed accounts going back ages and ages. Whether a bank uses the old information or not is entirely up to them. It's also up to them whether they exclude anyone for life. They must, however, provide almost everybody with a basic account if the applicant does not qualify for a 'normal' account (EU legislation). https://www.moneyadviceservice.org.uk/en/articles/basic-bank-accounts

I don't think you're implying from this that Natwest are obliged to offer OP a basic account.

If my understanding is correct, as OP already has a current account elsewhere, neither Natwest nor any other bank is obliged to offer him/her a basic current account.

colsten

badger09 wrote: »

I don't think you're implying from this that Natwest are obliged to offer OP a basic account.

No I am not. Details about eligibility for a basic account are in the link I posted