Are Banks allowed to refuse to give specifics reason for declining extension of overdraft?

Carnation99

In brief have excellent credit rating and financial records. Income has recently increased and usually increase overdraft facility from time to time  just in case money doesn’t enter account. Further income increase end of year. All declared to Nat West. Never used overdraft facility. Have savings. Excellent credit scores with all the big credit companies. Nothing untoward showing on their records. Nat West have refused the modest extension despite all the above and even after complaining they say it is not their policy to give specific reasons. 

Completely flummoxed. They have no answer as to how I can improve my chances of an increase. The App has just offered me the opportunity to apply for the increase I wanted and even the opportunity for a huge loan. Nat West say this is the way the App works when I challenged them as to how it could be responsible banking to offer such opportunities after declining a much much more modest request. 

Can banks do this???

Anyone recommend a better bank? 

What do I do now as nervous about applying for anything in the future ( very rarely take on debt) as rejection will affect credit rating. 

MorningcoffeeIV

Yes, that's fine for them not to give reasons, as they are confidential.

Your credit scores aren't real - lenders will be assessing your data. Check to see what appears and also consider your affordability.  It may also simply be a case of profitability - you say you don't use the OD, so it's better for them to allocate their time and funds elsewhere.

And while a rejection may affect the fake scores, it just shows as a search on your files, which isn't an issue on a well managed file.

eskbanker

Carnation99 said:

usually increase overdraft facility from time to time

[...]

Never used overdraft facility

Don't know why you'd repeatedly seek increases to an overdraft facility you never use, but as each time increases your available credit, that may well influence the bank's view about whether it's sensible to support you continuing to do so?

Zanderman

Carnation99 said:

In brief have excellent credit rating and financial records. Income has recently increased and usually increase overdraft facility from time to time  just in case money doesn’t enter account. Further income increase end of year. All declared to Nat West. Never used overdraft facility. Have savings. Excellent credit scores with all the big credit companies. Nothing untoward showing on their records. Nat West have refused the modest extension despite all the above and even after complaining they say it is not their policy to give specific reasons. 

Completely flummoxed. They have no answer as to how I can improve my chances of an increase. The App has just offered me the opportunity to apply for the increase I wanted and even the opportunity for a huge loan. Nat West say this is the way the App works when I challenged them as to how it could be responsible banking to offer such opportunities after declining a much much more modest request. 

Can banks do this???

Anyone recommend a better bank? 

What do I do now as nervous about applying for anything in the future ( very rarely take on debt) as rejection will affect credit rating. 

I don't think you have any right to know the bank's reasons - but at a guess I'd say it's simply because you want to increase a credit facility, and that you've done so before, but not used it.  That would suggest, arguably, that you're building up a credit facility that is unnecessary and (from the bank's point of view) possibly unsustainably/irresponsibly.  Other banks would probably do the same.

Not sure I understand (completely flummoxed too) about why you feel a need to increase your overdraft, even though you never use it? If you need to guard against loss of income the most obvious way is to have some savings, and if your income is increasing I assume that's feasible? We have used savings to buffer ups and downs of income for years.

And/or why not just have one or two credit cards, but leaving those largely (or totally) unused - we (Mrs Z-man and I) have an alarmingly high rainy day credit facility across 5 credit cards but only ever use one, and pay that off completely each month but we keep the others just in case - though actually don't really need to). 

Richard1212

The answer is " they can do whatever suits their own interests" as is the case with all banks. I'd really miss a large overdraft facility ----and I have a 5 figure overdraft on 2 accounts with NatWest. Can you think of moving to Premier Reward or Premier Reward Black ?

adamp87

You have to consider too no matter what excuse or reason they give you’d probably then be querying their decision further or asking why that is.

It could be your credit history isn’t ‘excellent’ to them. Your past transactions, account use, current credit limits and usage, income/salary against other risk factors they operate. A whole number of things.

artyboy

The days of having a large o/d facility "just in case" are long gone. If you don't use it, it's not in NatWest's (or any other bank's) interest to let you maintain a high limit.

From a risk standpoint, banks only have a certain amount of total credit that they can hand out to all their customers. And unless they really think you're special (hint, you're not), they're not going to waste a credit allowance that's not being used.

I've been with Natwest for over 30 years, have a premier account with them (that's the very lowest rung of the "special" ladder 🤣 ) and my legacy o/d facility - which was never asked for and was never used - got slashed a couple of years back. No biggie. Just the changing approach to risk and credit allocation by banks over the years. 

Anyway, hope this gives the OP a bit of perspective that it's not personal, it will be the same wherever they go, and maybe they just need to drop it...

booneruk

Carnation99 said:

In brief have excellent credit rating and financial records. Income has recently increased and usually increase overdraft facility from time to time  just in case money doesn’t enter account. Further income increase end of year. All declared to Nat West. Never used overdraft facility. Have savings. Excellent credit scores with all the big credit companies. Nothing untoward showing on their records. Nat West have refused the modest extension

Sounds like you don't really need an overdraft to me

Edi81

Overdrafts are not free for the banks especially if you never use it and pay interest to them. 

Bigwheels1111

My friends overdraft was withdrawn at renewal.
They stated that he did not use it correctly.
Going overdrawn and paying the free is wrong ?.

eskbanker

Bigwheels1111 said:

My friends overdraft was withdrawn at renewal.
They stated that he did not use it correctly.
Going overdrawn and paying the free is wrong ?.

What was the exact wording used by his bank?