Starling refused account

Lettingissues77

Hi,

I have opened a starling account with no issues. However my husband was declined. I was quite surprised as he has a good credit rating so am unsure why it declined.

He has a Santander account with a £700 od (which is maxed out.) I am unsure whether to apply for another basic account with someone. Or whether to approach Santander about the fact we will be entering a DMP and can the overdraft facility be removed. It only has one debt payment, a Tesco direct debit that comes out. If we cancel that can Tesco set it back up?

Is there any adverse reaction to us applying for for example a monzo? Not sure if it’s like credit where lots of applications are going to make it harder. 

Thank you

CliveOfIndia

Lettingissues77 said:

he has a good credit rating

He has a Santander account with a £700 od (which is maxed out.)

Those two statements contradict each other - regular use of an overdraft is always viewed negatively by any lender.

Lettingissues77 said:

Or whether to approach Santander about the fact we will be entering a DMP and can the overdraft facility be removed.

You'd very likely need to repay the OD before they would remove the facility.

Is there any adverse reaction to us applying for for example a monzo?

All lenders will have different criteria, so it's quite possible that you'd be declined by one but accepted by another.

But what is the reason you're wanting another account?

Lettingissues77

Because we are entering a DMP all the advice seems to be to open new basic current accounts that are not linked to any debt. 

By good credit I mean his score, but he has mot had a regular income for a long time, so am assuming that might be why he was declined. But I am unsure how they check this.  

CliveOfIndia

Lettingissues77 said:

Because we are entering a DMP all the advice seems to be to open new basic current accounts that are not linked to any debt.

Ah, OK, yes that's a good approach.

Lettingissues77 said:

By good credit I mean his score

Proof, if any were needed, that the score is utterly meaningless, as is stated on these forums time and again.  The score is not used by any lender - in fact, they can't even see it.

I would start by looking for a "basic" account, i.e. one that does not offer an overdraft or any form of credit facility.  There's still no guarantee, but you're slightly more likely to get accepted.

In theory a bank has no need to conduct a credit search for a basic account, though some still do.  And unfortunately, if a search is conducted this will be recorded on your credit file.  A couple of searches is nothing to be worried about, but lots of searches close together will start to raise concerns.

RAS

Banks check credit records, not scores. The absence of an income would be an issue for many.

What money is going to be paid into this account and can he ensure it does not go overdrawn?

Lettingissues77

He has just received a job offer. He was a student for years while he looked after our young children, he has struggled to find work because of the gap in employment. He’s secured a part-time job with the council, so hopefully he won’t have any gaps in income now. (His wage will be approximately £1000 a month.)

I don’t know if it’s just easier to stick with Santander and just approach them to ask for example for a £50 reduction in od a month. Then we wouldn’t be including it in the DMP as such. So not sure if that creates a problem as it would technically be treating that debt more favourably than my £1600 overdraft. But I have about £20k debt with my bank.

Almost all our debt is in my name as I have been the one with the income, so in some ways he could be left out of the DMP. But the debt is our joint lifestyle costs (mainly from only having one parent working) also I don’t really want to leave any credit lines open as I want this to reset the way we live so we are not borrowing. 

RAS

I'd try and clear his OD quicker, what's the current minimum payment and APR?

P.S, you did assign the CB income to him to cover NI issues? Think you can do that retrospectively?

Lettingissues77

I don’t know if there’s a minimum payment. I pay in money each month. Because for example our rent is paid from his account. He pays about £11 a month, and it’s been near the limit for over a year now. 

I am having my student loan next month (I study part time and work) I was planning to but £1500 as the start of my emergency fund. But should I use that to clear his overdraft? 

RAS

Is your partner also doing a DMP?

Are you receiving benefits that need re-calculating once he starts work? If so, I'd keep your loan safe until that's sorted. 

Lettingissues77

I think we should do a joint DMP as the debt is joint even though it is mainly in my name. However, we are not financially linked, so this is something I have struggled with. If I left him out he has about £3500 debt but I don’t see the advantage of leaving him out, other than leaving open the possibility of credit. Which I don’t particularly want to do. 

We don’t receive any benefits. I did an SOA before he lost his previous job and the recommendation was a DMP. He then was unemployed two months which has meant we are financially in a hole. We have over extended ourselves with debt, but with a joint DMP could hopefully pay off all the debt in 4/5 years. I have done a calculation with step change, but think I would prefer to self manage. Basically at the moment we are probably paying approximately £1600 a month on debt repayments. But not being left with enough to not keep spending on essentials on credit. 

This month as he is receiving nothing, we will not be able to afford all repayments. So am going to cancel the credit card repayments and miss payments for the first time. From next month I will move my salary to a starling and start saving as much as I can while waiting for everything to default. 

RAS

If you are doing a joint DMP, then he needs a new basic bank account for his salary. It may be better to apply after he starts work, so he can truthfully give his new income. And he needs to make the application. 

Wait for the first salary to hit, close down that DD, if he hasn't already, and treat it as just another debt on the DMP.

Meantime try and sort out an SOA that allows you family to survive if he has no income, and use his income to supplement (those are the months for clothes, buying kid's presents) and pay off the debt?