Any downside to opening multiple bank accounts?

Bridlington1

pridehappy said:

I've opened quite a few different accounts with different providers in the last few years, and I've never had any problems. I strongly think it depends on the bank, Lloyds and HSBC are a bit more stingy when it comes to opening accounts whereas the likes of Virgin Money and Nationwide just go ahead and open your account quickly.

Keep an eye out for any requirements on the current account you select, such as minimum funding requirements or Direct Debit requirements or sometimes you have to pay a fee (for example, Club Lloyds or TSB Spend & Save Plus). 

As long as you don't apply for an overdraft on the account, there is little effect on your credit score. Although, instead of manually closing the account in future, check the terms & conditions and if there are no fees for inactive accounts, just leave the account dormant and completely log out and forget about it and after a period, the bank will automatically close it for you with no impact on your credit score. Manual closures do impact your credit score.

I've found Lloyds to be one of the most laid back when it comes to opening accounts. I've currently got 2 current accounts with Lloyds and have had a couple more in the past, which I've used for switching purposes. Halifax are the same, I've got 5 accounts with them at the moment and they don't seem to mind.

The advantage with LBG banks is that they only carry out a hard search on the first account you open, future accounts do not create a hard search.

Band7

pridehappy said:

 

As long as you don't apply for an overdraft on the account, there is little effect on your credit score. Although, instead of manually closing the account in future, check the terms & conditions and if there are no fees for inactive accounts, just leave the account dormant and completely log out and forget about it and after a period, the bank will automatically close it for you with no impact on your credit score. Manual closures do impact your credit score.

 No lender will use the credit score that a credit reference agency works out for you. It is therefore, at best, just an indicator of what the credit reference agency thinks of you. You can ignore that number.

I have held a very large number of current accounts for a number of years. Many of these are inactive. The worst that has every happened was an email from HSBC saying they will close the account if I don't use it in the next xx days. As I wanted to keep the account, for access to other HSBC accounts, I deposited and withdrew £1, and am now awaiting a similar email at some time in the next 2 years. I have not come across any inactivity charges in any of the current account T&Cs.

I am also not aware that the - meaningless - credit score will be impacted if you close a current account yourself.

k_man

The only impact I have seen on my credit reports is comments/warnings related to opening multiple current accounts (even without overdrafts) in a short period of time, which could be a sign of desperation.
This also reduces the average age of accounts, which impacts perceived stability.

How much lenders actually care is a different matter, but I would avoid opening lots of account before applying for credit/mortgage.