Will opening a second current account harm my credit score?

[Deleted User]

xgingerx said:

Whilst i agree the credit scores given are a gimmick from my experience there is some truth and correlation from the score and the ability to obtain credit or not. So i would look at it and use it only as a good indication / guideline as to whether you may or may not get approved. ie If your credit score is showing as very Poor then regardless what the score says "Very Poor" wont be far from the mark and you will unlikely get sensible or meaningful credit.

Again, it means no such thing. People with excellent ratings get refused all the time, there are legions of posts on here. Same with people with poor ratings who get credit.

The score is a gimmick, end of story. No lender ever sees it. No decision on credit is ever made based on that score. It is a novelty and no use ion determining anything other than a bit of fun

xgingerx

Slightly ironic when you can join MSE credit club who have teamed up with Experian which gives you a credit score That then can match you to "Suitable Lenders" with a % eligibility rate 

[Deleted User]

xgingerx said:

Slightly ironic when you can join MSE credit club who have teamed up with Experian which gives you a credit score That then can match you to "Suitable Lenders" with a % eligibility rate 

Suitable being the ones they get commission for yes. I saw on uswitch the other day, there are 2 firms, HSBC and Barclaycard, offering 0 fee 0% BT cards that are not mentioned on the MSE site at all. Funny that

Alex9384

Deleted_User said:

... mostly because I keep opening current accounts for switch bonuses so ironically me becoming better off means I am more of a credit risk apparently, scores are utter nonsense, ignore them

Well, but it's not just the score. Lenders tend to see you in the worst light possible. In other thread someone said that opening multiple accounts in a short period is a typical sign of financial distress. I can imagine this is exactly what lenders are going to think.

Barclaycard became hysterical and slashed my credit limit because I had too high credit utilisation, so they decided to take my utilisation even higher, just so they can start worrying even more. Amazing logic. I eventually asked their CS to put a note on my account that I don't wish to have my limit lowered any further and that for their peace of mind I'll stop any new spending on that card and will only make repayments. So far, no more limit reductions.

Then Co-op looked at my credit files and were "worried that I might take on too much debt" so they declined my credit card application (first time declined CC in my life). Yes... they could clearly see that the only cards with high utilisation are still on promotional rate and I have couple other cards (including 11k limit) with zero spending on them, but sure... if I was in financial distress, I would certainly be applying for their reward card, rather than low rate or 0% purchase, right?

That's how their logic works. Whatever you are doing, you must be in horrible financial troubles.

[Deleted User]

Alex9384 said:

Deleted_User said:

... mostly because I keep opening current accounts for switch bonuses so ironically me becoming better off means I am more of a credit risk apparently, scores are utter nonsense, ignore them

Well, but it's not just the score. Lenders tend to see you in the worst light possible. In other thread someone said that opening multiple accounts in a short period is a typical sign of financial distress. I can imagine this is exactly what lenders are going to think.

Barclaycard became hysterical and slashed my credit limit because I had too high credit utilisation, so they decided to take my utilisation even higher, just so they can start worrying even more. Amazing logic. I eventually asked their CS to put a note on my account that I don't wish to have my limit lowered any further and that for their peace of mind I'll stop any new spending on that card and will only make repayments. So far, no more limit reductions.

Then Co-op looked at my credit files and were "worried that I might take on too much debt" so they declined my credit card application (first time declined CC in my life). Yes... they could clearly see that the only cards with high utilisation are still on promotional rate and I have couple other cards (including 11k limit) with zero spending on them, but sure... if I was in financial distress, I would certainly be applying for their reward card, rather than low rate or 0% purchase, right?

That's how their logic works. Whatever you are doing, you must be in horrible financial troubles.

You're mixing up opening credit with opening current accounts
If you apply / open lots of credit accounts in a short space of time, like applying for 3 loans or several cards, particularly if one or two are rejected it makes you look desperate and raises big red flags for lenders.
Opening current accounts with zero overdraft isn't a biggy for lenders, however the CRAs go into meltdown at the slightest change, positive or negative and drop the gimmick "score" then encourage you to pay them money to "fix" the score that they set themselves
Barclays went through a spate of dropping limits, it was all over the credit card board, mainly for people with lots of debt that wasn't being paid in full (ignoring BT offers) mostly as an (over)reaction to responsible lending / financial hardship rules. Barclays conversely keep upping my BT card limit and I had no issues getting Santander, M&S and NatWest BT cards when needed. The internal systems are where the complication comes in, hence even more of a reason to ignore the pretend score from the CRAs 

Alex9384

Deleted_User said:

You're mixing up opening credit with opening current accounts
If you apply / open lots of credit accounts in a short space of time, like applying for 3 loans or several cards, particularly if one or two are rejected it makes you look desperate and raises big red flags for lenders.
Opening current accounts with zero overdraft isn't a biggy for lenders, however the CRAs go into meltdown at the slightest change, positive or negative and drop the gimmick "score" then encourage you to pay them money to "fix" the score that they set themselves
Barclays went through a spate of dropping limits, it was all over the credit card board, mainly for people with lots of debt that wasn't being paid in full (ignoring BT offers) mostly as an (over)reaction to responsible lending / financial hardship rules. Barclays conversely keep upping my BT card limit and I had no issues getting Santander, M&S and NatWest BT cards when needed. The internal systems are where the complication comes in, hence even more of a reason to ignore the pretend score from the CRAs 

I remember my NatWest (and others) current account applications showing as application for credit on my credit files.

Are you 100% sure lenders distinguish credit card applications from current account applications? Or do you just think they do?

Also, having or not having an overdraft should not make any difference either. Banks themselves justify their hard searches by saying that you can go into overdraft even if you haven't applied for any, therefore they need to do hard search anyway when you're applying for the account.

[Deleted User]

Alex9384 said:

Deleted_User said:

You're mixing up opening credit with opening current accounts
If you apply / open lots of credit accounts in a short space of time, like applying for 3 loans or several cards, particularly if one or two are rejected it makes you look desperate and raises big red flags for lenders.
Opening current accounts with zero overdraft isn't a biggy for lenders, however the CRAs go into meltdown at the slightest change, positive or negative and drop the gimmick "score" then encourage you to pay them money to "fix" the score that they set themselves
Barclays went through a spate of dropping limits, it was all over the credit card board, mainly for people with lots of debt that wasn't being paid in full (ignoring BT offers) mostly as an (over)reaction to responsible lending / financial hardship rules. Barclays conversely keep upping my BT card limit and I had no issues getting Santander, M&S and NatWest BT cards when needed. The internal systems are where the complication comes in, hence even more of a reason to ignore the pretend score from the CRAs 

I remember my NatWest (and others) current account applications showing as application for credit on my credit files.

Are you 100% sure lenders distinguish credit card applications from current account applications? Or do you just think they do?

Also, having or not having an overdraft should not make any difference either. Banks themselves justify their hard searches by saying that you can go into overdraft even if you haven't applied for any, therefore they need to do hard search anyway when you're applying for the account.

It's not how they distinguish them in application process - they do searches on your credit record regardless - it's the impact of applying for a current account with normal use vs getting credit like a card, loan etc.

OD does make a difference in the longer term as it's available credit that will show on your file.

A current account is different to a credit account - you can have 10 current accounts and get credit fine, if you have 10 loans you might have more of an issue...