Can Credit Card APR go down easily?

boo_star

born_again said:

Interest rates are set by each bank. They will not increase/decrease just because you owe more of less elsewhere.

They absolutely will.

[Deleted User]

I'd say credit extra is likely to be the more accurate to be honest (but I don't work for LBG so can't say for sure).

As an example, my Credit Extra initially said 'you need to run your account in credit to get our lending offers' (that was when I didn't use my Halifax account). After chucking a few quid in it, it now says we won't lend whilst you have a default on your record (fair enough!). Stupid eligibility check says they'll give me a credit card for over £6k. So I'd say the eligibility check is a bunch of nonsense and the credit extra is likely to be the most accurate.

From what I know of LBG internal scores, I'd guess that credit extra is linked to them (maybe not exactly, but roughly - e.g. 'you can unlock our best lending offers' (which my friend sees) = top scoring band). Update dates also seem to be approx monthly (which would be in line with CRA feeds)

Overdraft thing, not sure. Maybe it means you can get more than you have?

Fingerbobs

Somerset_La_La_La said:

They do get a monthly feed as you say, so they would know if your credit position has improved (e.g. using less / closing accounts etc).

I had absolutelty no idea this happened. I thought they just received a snapshot of your status when performing a search (usually during an application for a new account) and that was it.

If the bank receives this feed, why do they need to conduct another credit search when I apply for a new product from the same bank? Does the feed stop when I close all the accounts I hold with a bank?

Do we agree to this ongoing feed when applying for a new credit product? I presume the wording means we do, but I've always thought I was consenting to a one-off search, not an ongoing feed of my data.

This comes as quite a bombshell to me.

[Deleted User]

The conducting of a credit search is a formality.convention - I believe because they are 'required' to inform [at least one] CRA that you've applied for a product - that was something I read a few years back. I'm not sure it's strictly true, as a lot of these fintechs (e.g. Jaja/Tymit) will do an eligibility check (soft search) and tell you outright you've been declined but then NOT register a hard search (even though you went through the physical act of applying for a product) - so either they are breaking the 'convention' (customer can apply, get declined, yet no record) or the older/more traditional banks are misleading. I'd wager it's the latter! 

Likewise mortgages these days aren't always hard search. Some companies only hard search after an AIP (sometimes soft search) has been accepted. So an applicant could apply for 5 soft search only AIPs and could be declined for the lot (e.g. based on a manual assessment, or automated failed scoring), but it STILL wouldn't register they've had these manual assessments. So I think the act of recording a hard search may well be phased out for existing customers in due course.

There is always value to your data (e.g. the fact you've applied), so my view is that the CRAs probably pressure members (banks) to do hard searches as part of their contracts. Without hard searches (and account performance data etc.) there is less value in the product they sell (credit 'scores' to consumers / data to banks) as it can't be used to indicate fraud or financial stress (e.g. if someone applies for 6 cards in 2 days, it's fair to say they're either: financially stressed, having fraud committed against them or playing the system (e.g. stoozing)).

The hard search the bank performs would also provide more up to date data than the latest monthly feed, so it could be useful/used just for that reason - do you want to give someone a £15k loan based on data which is potentially 29 days old, or would you want to double check now that they've not had adverse data registered in the meantime? Chances of your prime loan customer having adverse registered in those 29 days are minimal, but if it catches and blocks one who will subsequently not pay you, you've saved yourself £15kl

I'm pretty sure the feed would stop when all credit related products are closed, but couldn't say for sure! Consent is definitely given in all new account agreements these days - if you have an old account (over approx 15 years) it won't report and they probably won't get up to date data either (but they will do if you open any new/additional accounts).

On one of my loan agreements I actually have the ability to opt out of the credit feed (they still report, but don't see/process my ongoing data) but it then says my account (and ability to extend/renew/topup the loan) will then be blocked, unless/until I apply for a new loan from scratch (hard search).