Rejected for a feeder account with HSBC due to credit scoring

Doggysoft

After a month of waiting i received my rejection at 1 this morning. It says it is due to credit scoring. Using MSE Credit Club my score is 876 so I can't understand what they mean.

Do businesses have a credit score? Is that what they mean? I rang HSBC and the lady told me they can't give any feedback.

 Sadly I've been going round in circles with this and I haven't even been able to apply for a BBL with them because I haven't had a feeder account. It's taken over a month for the checks and rejection even though I'm a personal customer. 

(Apologies if posted in the wrong section)

[Deleted User]

Your credit score means very little, all financial institutions make their own judgements based on your credit record. 
Businesses do not have a credit rating/score, but they do have a credit record, things like CCJs, debt loading etc. would effect if they were willing to offer an account to that company (it is the denial of the feeder account, not the BBL itself). As would a company director with poor credit.

It could also be due to the business not having a satisfactory trading record, that might be because you were previously using a personal bank account for businesses purposes (which is a breach of terms and conditions) and so meaning that they can not separate business from personal cashflow. You might find it better to try and open a business account first, then apply for the BBL from that account, however the banks are now somewhat wary of opening business accounts for people that did not have one but have claimed they have been trading for some time. 

Doggysoft

Ok, thank you that's a bit more insightful than what they gave me. Regarding what you say about trading record then maybe that was it. I recently changed banks to Tide for business purposes and it is a relatively new company (although still formed in 2019). Perhaps they've based it on that because there's no others credit foul ups personally or business wise. 

[Deleted User]

@Doggysoft
Can you not apply for the BBL with Tide? I believe that they are now offering them.

Jeremy535897

MadMattUK said:

@Doggysoft
Can you not apply for the BBL with Tide? I believe that they are now offering them.

Another poster suggested that Tide had reached their limit. OP did not say whether the business was a sole trade, or a limited company, or how long it has been going.

Doggysoft

LTD. I'm on the waiting list for Tide but they ran out of money after about 2-3000 people apparently. The business itself has been operational since November.

Jeremy535897

If you are running a limited company's banking from a personal account in your name, that may be the problem. Feeder accounts are designed for individual customers running a sole trade through a personal account, and they normally only deal with businesses operating from before 6 April 2019.

dunstonh

After a month of waiting i received my rejection at 1 this morning. It says it is due to credit scoring. Using MSE Credit Club my score is 876 so I can't understand what they mean.

The "876" value is just marketing. It doesnt mean a thing to a lender.  Indeed, a lender doesnt see any values from any of the credit reference agencies.  Banks use the raw data and make their own interpretations from that.

It's taken over a month for the checks and rejection even though I'm a personal customer. 

As you are a limited company, you should be operating a business bank account.  A number of banks are rejecting applications where no business account is held when its a limited company. 

nyermen

Doggysoft said:

Do businesses have a credit score? Is that what they mean? I rang HSBC and the lady told me they can't give any feedback.

As mentioned by others, ignore any numbers given by rating agencies.  HSBC have their own internal modelling, and an associated "number" which is used.  Its a specific model for HSBC (note, while the general view is that the scores are irrelevant, some small lenders do "buy" a model from third parties, rather than developing, maintaining, back-testing, proving to the regulator, and so on, their own models).
I work in credit scoring, note I don't have experience of HSBC's, but if it's like others I've seen then commonly it consists of inputs including:

- Application scorecard (first time the bank experiences you, primarily based on credit history and the application information like earnings. Businesses also have credit history, albeit depending on size its normally with different agencies like moodys/S&P rather than the retail side like Experian etc)
- Behavioural scorecard (based on behaviour once the bank knows you, and weighted vs application score, on time as a customer).
Final score/assessment will depend on both, so you can be perfect with your bank, but be rejected due to other history, and vice-versa.  Because these "internal" models are used in regulatory returns (IFRS "ECL", Basel "IRB" and other areas), they have to be proven to the regulator, commonly through years of parallel running vs external models, back-testing (proving that historical projection correlates to actual etc).