HSBC overdraft

Frontera2

Wanted to increase my overdraft limit, used the online eligibility check which said I was “highly likely” to be accepted.

Duly applied and received a very blunt “We can’t give you an overdraft” at the moment, no explanation as to why or if it was because of anything on credit files etc. However they have done a hard search.

Is this normal for HSBC? Just seems odd to decline with no explanation? ( Hopefully there’s an HSBC insider lurking who could shed some light ) 

eskbanker

Banks in general (not just HSBC) aren't known for sharing reasons for rejections, so all you can really do is to look at each of your credit files and see if there's anything on them that's incorrect or likely to concern prospective lenders.  If you're already using an overdraft facility and want to extend it then that might suggest that your finances aren't likely to be seen (from the outside) as particularly healthy?

Frontera2

Totally get that but I’d expect to see something like, “we used credit scoring as part of your application” and a link to the credit reference agencies that they used? There was nothing whatsoever. 

eskbanker

Frontera2 said:

Totally get that but I’d expect to see something like, “we used credit scoring as part of your application” and a link to the credit reference agencies that they used? There was nothing whatsoever. 

If you're seeking credit then it shouldn't be a surprise that they'd check your credit status - if there isn't an explicit reference to this within the application process it's likely to be covered within the account Ts & Cs, but they're not obliged to disclose which CRA they use.  They'll use their own proprietary credit scoring algorithm in any case (again they're not required to divulge any details), so the data from the CRA(s) will only be part of that process.

HobgoblinBT

OP, it may be down to how you conduct your bank account.  The overdraft request could be out of proportion to the monthly credit to the account.  HSBC like many banks have an internal credit scoring system that takes account of the way your account is used. For example if an account is constantly in overdraft or is using it regularly each month, it could a sign of financial pressure, such as spending more than earning, or having made a large purchase that may have been better being put onto a loan.   In my day we used to have to send a rejection letter giving a reason, although that may have changed in the last couple of years.  Hope that helps.