Opening a Bank Account with credit defaults??

[MrSooty]

As someone with several Credit Card 'defaults' registered on my Credit record, I have found it difficult to open a Bank Account - I have one, but it is a basic 'cash card' type, like they give students and at my age, this is slightly demeaning

 

The defaults relate to a business failure several years ago and since then I have 'paid my way', do NOT have any CCJ's against me or Mortgage arrears, so not entirely sure why it is so difficult to open a 'proper' Bank Account??

 

I am not looking for an overdraft facility or a loan, just a normal 'grown up' account facility!!

 

I have seen the frequent references to 'parachute accounts', but that doesn't apply here...

 

Any helpful suggestions from CAG members?

[MrShed]

The obvious question would be how many is "several" years.

[MrSooty]

2003

[MrShed]

When did you last try and get a normal account?

[MrSooty]

Probably late last year - I have previously approached my existing 'Bank' at least twice, but they say the 'underwriters' check Credit References and won't support the application - even though the account has been operated without ANY ISSUES for the past three years or so.....???

 

I also applied for an account on-line and that got refused as well.....talk about being a 'second class citizen' - must be a form of discrimination or unfair practice!!??

 

Doesn't seem logical, especially as I am NOT asking for any of their money!!

[MilkTrayMan]

Am afraid it's a case of biding your time MrSooty...

NO-ONE has a God given right to expect ANY Bank to offer them Credit facilities...i.e. Debit Card, O/D limit etc etc.

It is a case of re-building your Credit Score.

Some Banks WILL consider U for a 'Grown Up' current account, despite any past indiscretions, but ONLY after U have satisfactorily conducted your Basic account with them over a period of time.

A word of warning...

Repeated Current Account applications with different Banks in any 6 month period WILL have an adverse affect on your Credit Score, making a successful application increasingly unlikely.

Personally, I would apply to the CRA's for an up to date copy of my Credit Report, to see the extent of any underlying problem that I may have first.

...Then I would research all the different banks to see which one offered the most suitable current account that I MAY like to have, making sure I found out BEFORE I applied, whether I'd be successful or NOT...

...

[MrShed]

Good post by MTM.

 

Also worth considering that, as far as I know, the defaults will make far less difference next year(after 6 years) - although they ARENT removed from your file.

[MrSooty]

Thanks to you both for the sound advice - but to be clear, I am NOT asking/expecting for credit facilities in any shape or form - one of the 'lessons learned' from the Credit Card situation, is that if you ain't got the cash, you don't make the purchase!!

 

In commercial terms, Banks make money from us as a result of the balance held in the account at any time and the transactions that move through the account - so why turn down the possibility of good business?

 

As MrShed says, maybe after 6 years have elapsed, I will see a change....

[MilkTrayMan]

...I am NOT asking/expecting for credit facilities in any shape or form...

What facilities do U regard as being a quintessential part of an 'Adult' current account MrSooty??...

 

 

...

[MrShed]

For one MTM, a PROPER debit card - not no debit card, or Electron rubbish...

[MrShed]

In commercial terms, Banks make money from us as a result of the balance held in the account at any time and the transactions that move through the account - so why turn down the possibility of good business?

 

 

I understand your point, but it is not them turning down the possibility of good business, but them turning down the possibility of loss making business.

 

Like it or not, people with a poor financial history TEND to repeat the same mistakes. This is less so over the timescale you mention, but still is a general rule borne out by the general stats - you have to bear in mind that, whilst all due credit to you for sorting yourself out in this respect, you are still in the minority, and as such banks are going to view you as part of that general group. Therefore, you are in a high risk category unfortunately, for a current account(which is very low potential gain). With the credit crunch on banks, I would also imagine that this will only negatively impact your ability to gain a "normal" account.

[MilkTrayMan]

For one MTM, a PROPER debit card - not no debit card, or Electron rubbish...

I DID ask the OP MrShed...

 

With MY particular Bank's current account...

 

A PROPER debit card is one where a VISA Debit facility is combined with the Cheque Guarantee bit, as well as the LINK ATM cash withdrawal thingy.

 

Both the Cheque Guarantee bit + the VISA Debit facility are able to cause the Card Holder to exceed his/her zero balance + will ONLY be initially authorised to be issued to the Card Holder if he/she has an eligibility to have O/D facility in place.

 

Therefore to have a PROPER debit card, one is in effect, asking/expecting for Credit Facilities in any shape or form...

 

 

Btw...I only have a Basic Cash Card myself...

[MrShed]

Not entirely true MTM - a debit card does NOT have to be a cheque guarantee card.

 

Nor by the way do you have to qualify for an overdraft to get a cheque guarantee card(although yes, you probably do have to meet the credit scoring to get an overdraft to get the cheque guarantee card, but thats a slightly different thing lol).

[MrSooty]

I think MRShed has the gist of my expectations and yes, the Electron card I have does NOT act as a cheque guarantee card - although as cheques become used less, this will cease to be an issue....

 

One thing that particularly bugs me is when I pay in OTHER People's cheques and they take a week or more to clear - longer than a 'normal' account would - I have had the conversation with my Bank and all they say is that this is standard with 'this type of account' (sneer, sneer)

 

Given the HUGE risks - and losses - racked up by Banks every year (I'm ex-NatWest, so trust me on this!!!), often through pure greed, and the fact that a large percentage of their profits come from small businesses (like me), the exposure to loss in this instance would be virtually nil and would be very good customer relations - which they simply aren't good at!

 

I have a credit card, which has been opened and operated entirely satifactorily over the past 3 years or so AND a mobile phone contract, as well as a perfect mortgage payment record, do these 'positives' not count for anything...??

 

Thanks anyway folks - keep up the good work!

[tifo]

For one MTM, a PROPER debit card - not no debit card, or Electron rubbish...

 

Many banks have replaced the Electron card with a Visa Debit. Solo acts as a Maestro card anyway. So there is no problem using either. I have both and they work fine.

 

I'm an adult and i don't like it, but as i am responsible for my own past credit record, i will have to do without an overdraft and cheque book. It's just the way it is.

 

You admit the defaults relate to business failure, that is not the banks fault.

[123vivienneb]

I am in the same position. I have banked with Abbey for over 25 years, and they have just refused to renew my debit card, thus, pretty much rendering my account useless to me!

 

I have a savings account with Nationwide but they will not upgrade to a current account. I do NOT want credit or an overdraft, I just want to put my money in and be able to operate a current account in the black!

[Mrs_Ryan]

Ive got a Visa Debit card thats not a cheque guarantee card... nor do I have an overdraft... I have multiple defaults and a couple of CCJ's, but yet I only got this card in December. Some banks seem to be stricter than others.... NatWest for example wouldnt give me a Maestro as what was left of my credit rating was shot thanks to their mistakes!!!

 

tifo - sorry, but thats not strictly true, there are a lot of places (hotels, train companies etc) that will take Maestro but not Solo, the only time Solo acts as Maestro is abroad. But what you're saying about Electron makes sense, I think my bank has done that, I have one of the cursed cards it seems (I have had so many arguments with East Midlands Trains who keep telling me its not a Visa Debit I have, its an Electron and they wont take it, despite the fact it says Visa Debit on it.... )

[tifo]

tifo - sorry, but thats not strictly true, there are a lot of places that will take Maestro but not Solo, the only time Solo acts as Maestro is abroad.

 

I'm talking from my own experience.

 

I buy lots of things online (UK only) and where they take Maestro but not Solo, my card goes through without a problem and then money gets debited from my account. The bank has told me (Natwest) that is because it's the same system (Solo is still Maestro), only that Solo checks the balance before authorisation to make sure you have the money and Maestro doesn't always check as it may hit the bank some days later.

[poochball]

I have the same problem unfortunately.

 

I was lucky though, when Woolwich was finally moved over to Barclays, instead of my Electron Card, I got a fully fledged Visa Card.

 

I cannot get an overdraft etc but I am just glad that at least I have a Bank account :grin:

[callybags]

With an ultra basic account just a cashpoint card to me there are no credit facilities at all, I have now been declined for Lloyds and Abbey. I do have adverse history, I have been discharged from bankruptcy for a few years, yet on the FSA info sheets most of the banks say provided you are not an Undischarged bankrupt or history of fraud you should be ok.

I read on money forums that after discharge they get an account with Abbey:confused: