SWITCHING BANKS & CLOSING UNUSED CREDIT CARDS: IMPACT ON CREDIT SCORE

PostHoc25

Continuing my efforts to be more ethical with my finances, I did the Nationwide switch after 17 years with NatWest and am expecting my good credit score to take a bit of a dive. That was my longest financial relationship in fact.

Having switched banks (+ the 2 savings accounts I had there), the only other thing I want to switch is my Aqua Gold card. I have a limit of £4,600 with them and an outstanding balance of £360 which will be cleared by the 1st April.

I also have an Argos New Day credit card with a £960 limit which I took out in Sep 2020, spent about £200 a year on but haven't used since July 2025 so I figured I should close it and by doing it at the same time as the NatWest closure, my credit file will hopefully just have one almighty dip and recover after 3-6 months. Just did that now, had to Google where they had hidden the request closure option - it was well hidden!

My aim is to get Nationwide to offer a balance transfer card for the Aqua CC.  I do not expect them to match the limit, £1000 limit for emergencies would be fine. I know right now, I would fail to get any offer. When I did a soft search for credit cards, one site offered me nothing (stating no disposable income) another offered 5 or 6 VERY high interest cards.  

Whilst my credit scores are good, my DTI ratio is currently 65% and after I clear my outstanding debts in the next few months (May/June at the latest), it will only drop to 53% (Rent on its own is 51% of my income the other 2% is a 4 year pre-paid funeral plan which I intend to increase payments on but is a tiny percent of debt). I am currently saving around 12-14% each month and should be able to increase it to around 16-17% once my debts are cleared. Not dipping into those savings is of course the hardest part of it all!

I am solely reliant on UC (LCWRA) and currently pay £3.07 of that to top up the housing allowance as I am at the maximum rent allowance for my area. My rent increases again in April, so I will need to pay £21.62 to top it up - based on UC increased rates predicted for May's payment.

(Not really liking how despite the UC increase I will actually be worse off, but I do have a nice, if business savvy landlady, and having moved house 26 times, I'm very willing to make allowances.)

So after all the rambling, my questions: Does anyone have knowledge or experience with Nationwide credit card approvals? Do you think being a Nationwide customer for at least 6 months and running my current account well/saving diligently with them will help override the biggest issue for me, which is low disposable income and high debt to income ratio thanks to housing costs?

I'm attaching screengrabs of my current credit scores with Experian (1005/1250) and MSE. It will will be interesting to check back and compare them in 3 months and 6 months if nothing else!

la531983

Nobody sees the "score" except you so most of the 3.17am overnight post above was based on the fallacy that it is meaningful.

PostHoc25

la531983 said:

Nobody sees the "score" except you so most of the 3.17am overnight post above was based on the fallacy that it is meaningful.

yes, I posted it for my records and just out of interest to update in 3 months and 6 months and see what effect the closure of my accounts might have.   

born_again

https://forums.moneysavingexpert.com/discussion/comment/81855744#Comment_81855744

While it will have a effect.

As said lenders do not see the score.

So the only interest is your own & the CRA that makes up the figure.

Lenders look at credit history (missed payments) & your income to available credit (Affordability) Plus their risk appetite at that time.

PostHoc25

https://forums.moneysavingexpert.com/discussion/comment/81856246#Comment_81856246

Yes, my payment history will be fine, it's the affordability that I think will cause me issues. I'm wondering if Nationwide are known as being particularly strict amongst lenders?

vacheron

As above, your score counts for nothing, the data in your credit report is what counts, and this data is not really open to much interpretation.

Therefore, if you have been rejected for mainstream credit before due to a lack of disposable income (affordibility), and your circumstances have not changed, you may struggle to get a good mainstream card with a good promotion on it based on this fact, and regardless of the "score" the credit agencies may currently be telling you that you have.

I also wouldn't just focus on Nationwide just because you will now be banking with them. This kind of loyalty counts for very little these days if you don't fit their lending profile.

By way of example, I have 11 credit cards, and just about the only mainstream lender that refuses to entertain me is Barclays, even though that is by far my longest running account and I have a premier service and a mortgage with them, plus credit cards with them in the past, i've been flat out rejected by them every single time for about the last 4 years! 😄

PostHoc25

https://forums.moneysavingexpert.com/discussion/comment/81856718#Comment_81856718

Ooh, interesting about Barclays! Yes loyalty is an interesting one. I was with NatWest for 17 years., always had emails and offers to do a financial review which was futile. But things improved end of last year, so I did do a 45 min chat where the advisor agreed I had little money! I never even thought about approaching them for a CC because I knew they could see the chaos my finances were in on the monthly and would refuse 🤣

An advisor at Nationwide had a quick chat with me last week and we both agreed I should probably wait at least 6 months then go back and see her for some insight, (hopefully). I realise that ultimately it will come down to computer says no, but the fact that she was even willing to talk about credit cards was refreshing.

I also bank with Co-op but they literally just hold my UC and then I move it to my (now Nationwide) c/account for bills etc. I suspect they would decline me too, but I would consider them, again, not so much about loyalty but ethics of who has my money.