First Direct current account application declined

Elika0215

Long story short, I'm trying to sort out my finances and help someone else too.

Problem is an application for a First Direct joint account has been declined and while I know that nobody can give me an full explanation, some opinions would be welcome.

A little info;

- No debts other than this months credit card spend (used for cashback). Card ALWAYS paid in full. One payment missed the deadline by a few days in 2017 due to an oversight.

- All other bills always paid in full and on time (inc historically)

- Have never been overdrawn

- No odd activity such as hefty cash deposits/withdrawals or gambling, overseas transactions. Just normal day-to-day stuff.

- Savings (not tied up) of £80k and mortgage outstanding of £46k

- Net income is pretty much equal to net outgoings

Only things I can think of that may have a negative impact are:

- Just under two weeks ago, bought a car for around £15,500 which was £13,500 cash and £1,500 VW finance loan. I chose the loan so we could benefit from two years free services and intend to pay it off in full within two weeks.

- One of the joint account holders (the first applicant) is employed but the other is unemployed due to disabilities.

- The savings was a recent inheritance so those funds have only been in the account for a month or so

Does anything stand out (I know it's an opinion only) that is the cause of the declined application? If so, any way to fix it or a process that I could follow to find out more?

Oh, and I did talk to First Direct but understandably, they couldn't give me any more information.

Thanks as always.

eskbanker

Have you checked your credit files? Doing so via the three credit rating agencies will let you see (a) whether everything recorded there is factually accurate, (b) some analysis of which aspects are likely to be seen as positive or negative and (c) some hints or tips as to what could be improved and how.

Did the application ask for info about savings? They're typically ignored when applying for credit-related products (including current accounts), i.e. income is more significant.

Ultimately though, any bank can pick and choose which customers it wishes to take on and if you didn't fit their profile initially it's doubtful that there's anything you can do other than to apply elsewhere, or perhaps go for a sole account rather than joint. Based on anecdotal reports on here, the HSBC group can be quite picky....

Elika0215

eskbanker wrote: »

Have you checked your credit files? Doing so via the three credit rating agencies will let you see (a) whether everything recorded there is factually accurate, (b) some analysis of which aspects are likely to be seen as positive or negative and (c) some hints or tips as to what could be improved and how.

Did the application ask for info about savings? They're typically ignored when applying for credit-related products (including current accounts), i.e. income is more significant.

Ultimately though, any bank can pick and choose which customers it wishes to take on and if you didn't fit their profile initially it's doubtful that there's anything you can do other than to apply elsewhere, or perhaps go for a sole account rather than joint. Based on anecdotal reports on here, the HSBC group can be quite picky....

Nothing on the application about savings unfortunately.

Thanks for the recommendation to check my credit report. Equifax is not taking the savings of £80k in to account as the last update on the credit report was before the deposit. The account is currently displayed as inactive which would also affect my chances, right?

By the way, every other account on the report displays zero even though I have funds in them. Is that a standard basic credit check thing or something wrong with the report?

Again, thank you. Genuinely appreciated.

TheEffect

Your savings are irrelevant in regards to your credit report. Your credit report will only show money that you have borrowed, it will not show how much money is in your savings account. In fact, most savings accounts do not even show on a credit report.

First Direct are particularly fussy about who they accept - as it's a join account they may have declined you simply because one of you are unemployed.

Ensure your credit reports shows zero missed payments, that you are both on the electoral roll, and that there are not many credit searches within the past year.

If your outgoings are the same as your income, and one of you are unemployed, this is most likely a reason as to why you have been declined.

YorkshireBoy

TheEffect wrote: »

In fact, most savings accounts do not even show on a credit report.

No savings accounts show* do they?


* High interest current accounts will "show", but only show overdraft limits (including zero where you don't have one) and current overdraft usage.

TheEffect

YorkshireBoy wrote: »

No savings accounts show* do they?


* High interest current accounts will "show", but only show overdraft limits (including zero where you don't have one) and current overdraft usage.

I've not seen a savings account that does show as of yet, not that I have many of them.

Elmer_BeFuddled

Using a credit card for cashback is seen (I believe) by the financial institutions/credit reference agencies as a big NO-NO.

It shows (whether rightly or wrongly) you are over-stretching your financial situation, even if paid off in full when due.

Elika0215

OK - The savings account was displayed on the report but without an amount.

Obviously, I just don't tick all the boxes which is one of those things I guess. Shame really as I don't even want an overdraft or any kind of debt. Ho-hum.

Thanks for feedback and thoughts.

Herbalus

YorkshireBoy wrote: »

No savings accounts show* do they?


* High interest current accounts will "show", but only show overdraft limits (including zero where you don't have one) and current overdraft usage.

I was also under the impression that they don't. After all, they're not credit accounts and there is no facility to be overdrawn on them.

Elika, which bank are you with currently, and what is the name of the savings account that shows on the credit report?

YorkshireBoy

Elmer_BeFuddled wrote: »

Using a credit card for cashback is seen (I believe) by the financial institutions/credit reference agencies as a big NO-NO.

It shows (whether rightly or wrongly) you are over-stretching your financial situation, even if paid off in full when due.

You can't get "cashback" (within the scheme rules) on a credit card. Are you thinking of a money transfer? If so, then that's not shown separately either. Only cash withdrawals and pseudo cash transactions are shown separately on the credit card section of your credit report.

Elmer_BeFuddled

YorkshireBoy wrote: »

Only cash withdrawals and pseudo cash transactions are shown separately on the credit card section of your credit report.

Okay, that is actually what I meant, withdrawing cash, not cashback.

(Spank me Ms. Rowbottom until I am thoroughly chastised!) :rotfl: