Challenger Banks and Credit Ratings

Kewsea

I banked with Halifax for many years and, during that time, my credit score (yeah I know - as provided by Experian etc but let's forget about that for now) was always healthy and, on the odd occasion I needed a new credit card, there were a plethora of options open to me. I have no debt whatsoever, never have.

A couple of years ago, borne out of frustration with Halifax, I moved my banking to Starling and that's my main bank for salary, direct debits and general living.  I don't use their overdraft and only have 2 other current accounts with First Direct and Mozo.  Again, no overdrafts.  I have one credit card with FD and on the odd occasion, I use it I clear it monthly.

That's been the same scenario for a long time so a pretty straightforward financial situation. As above, was always able to have multiple options for credit if I ever needed it.

Since moving to Starling that seems to have changed.  I haven't applied for credit and don't need to but it struck me that, since then, the 'options' I am given when curiously looking are massively reduced.  This may be coincidental with banks tightening purses due to the pandemic/timing etc but the above credit score is still the same.

So I am just curious - is there any reason why you'd be disadvantaged by not having your main bank with one of the high street/traditional banks?

It's not an issue for me particularly, just a discussion point out of curiosity.

Thanks.

Shanwick

I wouldn't be too concerned about which cards are being suggested on comparison sites since they don't paint a holistic picture. Lending markets have changed in the past two years so that might be part of what you are seeing. For somebody early in their financial journey there may be some advantages to building a relationship with a financial institution which has a variety of products but once you have a track record in your credit file that becomes less of an issue.

I would suggest simply checking all 3 credit files using the free methods just to make sure that there is nothing to be concerned about in any of them

Kewsea

Shanwick said:

I wouldn't be too concerned about which cards are being suggested on comparison sites since they don't paint a holistic picture. Lending markets have changed in the past two years so that might be part of what you are seeing. For somebody early in their financial journey there may be some advantages to building a relationship with a financial institution which has a variety of products but once you have a track record in your credit file that becomes less of an issue.

I would suggest simply checking all 3 credit files using the free methods just to make sure that there is nothing to be concerned about in any of them

Thanks.  I have actually done so and there's nothing amiss in any of them so that's good to know.  As I say, it's not so much a concern as my just being curious as the change did appear to occur when I changed banks so it's easy to draw that conclusion.

Coincidentally I have also noticed on sites like Clearscore that Starling is not listed as an available bank for their 'affordability score' where you provide a temporary link to your account/CS.  They then allegedly assess your true creditworthiness based on your account activity rather than the seemingly speculative numbers that CRAs arrive at.

I've no idea how realistic that is, nor have I any intention of finding out, but again I pondered whether the omission of Starling had anything to do with my original question.

[Deleted User]

Lenders don't see which bank you're with, so it will have no impact.

dr_adidas01

Deleted_User said:

Lenders don't see which bank you're with, so it will have no impact.

True they don’t when checking your credit report, but most credit applications ask for sort code and account number and how long you have been with your main bank account provider. 

From the sort code and account number they can check which bank it is and how long it has been open, and if the account holders name matches that of the application being made. 

So quite clearly it does have some sort of impact otherwise they wouldn’t ask this on applications. 

Thrugelmir

dr_adidas01 said:

Deleted_User said:

Lenders don't see which bank you're with, so it will have no impact.

So quite clearly it does have some sort of impact otherwise they wouldn’t ask this on applications. 

Longevity of relationships has a value. Those in financial distress are more likely to walk away/more frequently change their bank. For the majority their primary banking relationship is very mundane. Data combines to build a fuller picture of the applicant. 

penners324

The Affordability score by the CRAs is a data mining gimmick.

Starling isn't available as the API they've developed isn't compatible.  Read a report somewhere that Starling's is more advanced as they believe the standard API isn't secure enough