Does the number of bank accounts you have affect your credit rating?

annetheman

Hi all,

As above: does the number of bank accounts you have affect your credit rating?

They could be savings accounts, credit accounts, business accounts etc. But does it matter to a lender?

I have only ever banked with NatWest for the past 20 years, apart from 1 year when I also had a Metro business bank account. But most people I know have a Barclays account, HSBC account, Halifax accounts, etc etc....

Am I missing an opportunity to add to my credit rating by opening more accounts?

[Deleted User]

It gives more data for lenders to review.  So could be positive or negative, depending on how you use the,.  But bank accounts in general don't tell them much and savings accounts aren't seen.

Don't let your financial products be driven by your credit files, beyond being able to show you can manage credit.

annetheman

Deleted_User said:

It gives more data for lenders to review.  So could be positive or negative, depending on how you use the,.  But bank accounts in general don't tell them much and savings accounts aren't seen.

Don't let your financial products be driven by your credit files, beyond being able to show you can manage credit.

Ah, okay. That makes sense. I have always understood credit rating to be the first place lenders will look and can reject you outright from that point if it is low? Or rather they just give you higher interest rates?

[Deleted User]

No.  No one ever sees your credit rating apart from you.

DCFC79

annetheman said:

Deleted_User said:

It gives more data for lenders to review.  So could be positive or negative, depending on how you use the,.  But bank accounts in general don't tell them much and savings accounts aren't seen.

Don't let your financial products be driven by your credit files, beyond being able to show you can manage credit.

Ah, okay. That makes sense. I have always understood credit rating to be the first place lenders will look and can reject you outright from that point if it is low? Or rather they just give you higher interest rates?

Your history is what lenders, banks etc see.

annetheman

Right, so if I potentially open another current account with an overdraft, and deposit money into it, perhaps use it to pay bills or something regular like that, then never use the overdraft, that could add to my history as being "responsible" enough never to use available credit and also make bill payments on time?
Then my Natwest account which I'm currently using for everything can just be random spend - would that be worthwhile or pointless in terms of what a lender would see?

Thanks for your help!

annetheman

Just remembered something if anyone has any perspective on this:

I opened a Newday Amazon credit account and used £4.90 of it, which I paid off immediately. No interest was incurred on the card and I didn't use it anymore so I closed it in January this year.

At the time, I didn't know that you should just keep credit accounts you don't use open! Has closing this account (limit was £5,000) affected my credit rating negatively? It's the only reason I can think of why a previously high score is now high on some credit agency reports and "fair" on others

DCFC79

annetheman said:

Just remembered something if anyone has any perspective on this:

I opened a Newday Amazon credit account and used £4.90 of it, which I paid off immediately. No interest was incurred on the card and I didn't use it anymore so I closed it in January this year.

At the time, I didn't know that you should just keep credit accounts you don't use open! Has closing this account (limit was £5,000) affected my credit rating negatively? It's the only reason I can think of why a previously high score is now high on some credit agency reports and "fair" on others

As mentioned don't worry about the score.

[Deleted User]

Anything can affect your score. The poor weather could be bringing it down. And the Coronavirus will drop it by 50 points. It's not a reliable indicator of anything. 

Lenders will look at your files as a whole.  Closing a single account could have an impact if you have limited history, but otherwise, it wouldn't concern your average lender.

Are you actually experiencing credit problems, or is it just a change in a made up number which is concerning you?

annetheman

Deleted_User said:

Anything can affect your score. The poor weather could be bringing it down. And the Coronavirus will drop it by 50 points. It's not a reliable indicator of anything. 

Lenders will look at your files as a whole.  Closing a single account could have an impact if you have limited history, but otherwise, it wouldn't concern your average lender.

Are you actually experiencing credit problems, or is it just a change in a made up number which is concerning you?

No credit problems, I have 2 credit cards 1 is a student one I no longer use but haven't closed (lost the card ages ago and it only had a £450 limit) the other is my "everyday use credit builder" card which I pay the balance of in full every month. I have never paid interest or paid late.

Both are with the same bank as my current account, which has been open since 2000.

I guess I'm mostly concerned because both Credit Karma and Experian show this Newday card as "open" with balance £0, why? I closed it in January?

I'm scared that when I make the mortgage application, if there is a discrepancy between the number of cards I say have and the number of cards their reports say I have, they will reject me. Should I call the credit agencies and ask them to correct this?

I've just called Newday and they said it's closed and "category 8" has been sent to the credit agencies, not sure what that means.

[Deleted User]

January (although you don't seem sure if it was January) is very recent for it to be updated in the monthly view you see of your credit file. 

You won't tell the mortgage lender how many cards you have. They'll ask you for the debt you have.

You're seriously over-worrying about this.