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Overdraft & Poor Credit History Watch

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    Hi,

    Does anyone know whether students with poor credit histories are entitled to overdrafts and how much they would be limited?

    Experian says my credit score is 'very poor'.
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    (Original post by mynameisntdoug)
    Hi,

    Does anyone know whether students with poor credit histories are entitled to overdrafts and how much they would be limited?

    Experian says my credit score is 'very poor'.
    Overdrafts on Student Accounts DO go through Credit Checks, but they do tend to be more favourable as it's a temporary overdraft and you have guaranteed money going in. I'd apply for 2 Student Accounts if I was you. One should be approved.
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    (Original post by OllieDS)
    Overdrafts on Student Accounts DO go through Credit Checks, but they do tend to be more favourable as it's a temporary overdraft and you have guaranteed money going in. I'd apply for 2 Student Accounts if I was you. One should be approved.
    Thanks man, any particular recommendations for banks? I'm thinking Santander and Co-Op.
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    (Original post by mynameisntdoug)
    Thanks man, any particular recommendations for banks? I'm thinking Santander and Co-Op.
    Santander give you a 4-Year Railcard which is incredible if you're travelling back home a lot.

    Natwest give you a Tastecard which gives you 50% off food at almost every restaurant/take away.

    Railcard + Tastecard = £1,000's saved every year.
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    (Original post by mynameisntdoug)
    Hi,

    Does anyone know whether students with poor credit histories are entitled to overdrafts and how much they would be limited?

    Experian says my credit score is 'very poor'.
    Have you looked into why your rating is poor? Have you defaulted in the past?
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    (Original post by OllieDS)
    Overdrafts on Student Accounts DO go through Credit Checks, but they do tend to be more favourable as it's a temporary overdraft and you have guaranteed money going in. I'd apply for 2 Student Accounts if I was you. One should be approved.
    Not if someone has credit defaults again there name, regardless to say its done on a credit scoring system. Certain banks wouldn't entertain the thought of it once you've developed a relationship with a bank it says on the screen in the branch whether or no that person is eligible for certain products. Its there to prevent someone going through the hassle of pitching to a potential client x, y and z. Late payments on credit cards, overdrafts and late payments to credit facilitated institutions,they have a 0-9 on scoring. Now certain banks will look on credit files to see if you've borrowed off payday institutions and they won't lend to you (high risk borrower). Best to get up a credit report, it will tell you what you can borrow or not, without doing so many credit searches. Those searches stay on your file for 12 months and it shows your credit hungry, which isn't good.

    Btw no such thing as temporary overdrafts, read the Terms of Business. The only time they do that is when your on a "management plan" and dealing with a banks debt recovery team.
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    (Original post by Hedgeman49)
    Have you looked into why your rating is poor? Have you defaulted in the past?
    Yeah, 1 default I'm still repaying. May be multiple instances of missed bills (phone contract) though as well as a bankrupt parent.

    Credit score is apparently 381 with Experian.
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    (Original post by SloaneRanger)
    Not if someone has credit defaults again there name, regardless to say its done on a credit scoring system. Certain banks wouldn't entertain the thought of it once you've developed a relationship with a bank it says on the screen in the branch whether or no that person is eligible for certain products. Its there to prevent someone going through the hassle of pitching to a potential client x, y and z. Late payments on credit cards, overdrafts and late payments to credit facilitated institutions,they have a 0-9 on scoring. Now certain banks will look on credit files to see if you've borrowed off payday institutions and they won't lend to you (high risk borrower).
    I know, I said they were "more favourable" to accept Students.

    I didn't say they blindly accept them or that it's incredibly easy.

    I have never had credit or a loan in my life so my credit history is non-existent which is sometimes as bad as a poor credit history. However I got accepted by two banks out of two for a Student Account and they told me because I'm a Student the underwriters would be more favourable to accept me.
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    (Original post by OllieDS)
    I know, I said they were "more favourable" to accept Students.

    I didn't say they blindly accept them or that it's incredibly easy.

    I have never had credit or a loan in my life so my credit history is non-existent which is sometimes as bad as a poor credit history. However I got accepted by two banks out of two for a Student Account and they told me because I'm a Student the underwriters would be more favourable to accept me.
    Definition is student is open and they don't care whether or your a student. A student account has just been packaged up etc to be sold (features and benefits). Thats looking at it from a fresh credit check for an 18yo, but as you develop a credit rating older you get. It is based on individual circumstances, if some has had late payments or credit defaults, it doesn't matter if they are a student or not. You would be surprised there are young people on IVAs and debt management plans, personal banking advisors are targeted just to get people to open current accounts so they can cross sell you home insurance/contents insurance. They would tell you anything to get you to sit down and book you for further appointments,lol. Oh having no credit cards or loans at your stage in life is good, just manage your account and money well, next you will have Cater Allen wanting your business. They deal with ££££ of Santander, usually its invitation only.
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    (Original post by mynameisntdoug)
    Yeah, 1 default I'm still repaying. May be multiple instances of missed bills (phone contract) though as well as a bankrupt parent.

    Credit score is apparently 381 with Experian.
    700 is average, that is terrible, you can look on there it will tell you what you are eligible for on the offers and services. If you have another credit check it will go down further! That credit default stays on there for 6 years, if you still owe the money you might as well speak to then to pay it to get it updated to "satified".
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    I have credit defaults myself from years ago.

    I have a 500 overdraft because of a good record with the particular bank but can't get a student account.
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    (Original post by SloaneRanger)
    700 is average, that is terrible, you can look on there it will tell you what you are eligible for on the offers and services. If you have another credit check it will go down further! That credit default stays on there for 6 years, if you still owe the money you might as well speak to then to pay it to get it updated to "satified".
    I did say it was very poor. Would be helpful if you could give me some advice instead of telling me what I already know?
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    (Original post by mynameisntdoug)
    I did say it was very poor. Would be helpful if you could give me some advice instead of telling me what I already know?
    Oh you should get a student account, do you have a current account with any bank at the moment. Is a simple upgrade, no credit check! As for the overdraft very unlikely, but least you get the benefits of it.
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    (Original post by SloaneRanger)
    Oh you should get a student account, do you have a current account with any bank at the moment. Is a simple upgrade, no credit check! As for the overdraft very unlikely, but least you get the benefits of it.
    The bank I'm with only offers a "customized card" as the benefit :mad:
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    (Original post by mynameisntdoug)
    The bank I'm with only offers a "customized card" as the benefit :mad:
    If you want to move bank, the main thing is you have never had an iva or been bankrupt. So you could try to apply for them anyway, if you really want to move bank. The Natwest deal looks good, there few others out there with good perks, just try! Nothing ventured, nothing gained!
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    (Original post by SloaneRanger)
    If you want to move bank, the main thing is you have never had an iva or been bankrupt. So you could try to apply for them anyway, if you really want to move bank. The Natwest deal looks good, there few others out there with good perks, just try! Nothing ventured, nothing gained!
    hardship loan
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    (Original post by SloaneRanger)
    Oh you should get a student account, do you have a current account with any bank at the moment. Is a simple upgrade, no credit check! As for the overdraft very unlikely, but least you get the benefits of it.
    Its not a simple upgrade, they credit check at Lloyds.
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    (Original post by Rakas21)
    Its not a simple upgrade, they credit check at Lloyds.
    Not if they don't offer you an overdraft and then, they do it without a credit check as it's based on past history with the bank. I got a loan to build my credit profile to the highest it can be) from Lloyds not long ago and it was an internal check rather than a credit profile check.

    As with all things, a good relationship with a bank can make your life easier as they'd do internal checks not external checks. HSBC were for a responsible lender, quite irresponsible when they lent to me with my student account, in 3 years I'd only missed one payment, it was when I opened a credit card account with Halifax and didn't realise that I'd gone past my limit and got charged a **** lot did my credit profile suffer and has been suffering since! I really need to close that account, more hassle than it's worth.
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    (Original post by tehFrance)
    Not if they don't offer you an overdraft and then, they do it without a credit check as it's based on past history with the bank. I got a loan to build my credit profile to the highest it can be) from Lloyds not long ago and it was an internal check rather than a credit profile check.

    As with all things, a good relationship with a bank can make your life easier as they'd do internal checks not external checks. HSBC were for a responsible lender, quite irresponsible when they lent to me with my student account, in 3 years I'd only missed one payment, it was when I opened a credit card account with Halifax and didn't realise that I'd gone past my limit and got charged a **** lot did my credit profile suffer and has been suffering since! I really need to close that account, more hassle than it's worth.
    Yep, you've summed it up correctly.
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    There's a few things to note here.

    If you go to open a new account in a new bank with an overdraft facility, even if it is a student account, they will run a credit check.

    There is no universal credit rating, so a 381 from Experian doesn't mean much. Each time a bank runs a credit check they will run their own scoring algorithms and make decisions in their own ways. This is important for a student account because a lot of new students won't have high credit ratings because they won't have borrowed any money before, short of a mobile phone contract, and banks are unlikely to turn student overdrafts down on this basis alone, particularly as they often ask for Student Finance dates, proof of university acceptance, etc. However, if you have defaulted on credit before, this will be taken into consideration as normal and you stand a higher chance of being turned down.

    Each time a credit check is run by a bank for an overdraft, it will be recorded on your credit report. Apply for too much credit or apply too frequently and your chance of being turned away will increase as you'll come across desperate and lenders will realise that you've been turned away by other lenders.

    If you apply for an overdraft with your existing bank, they may run an internal check rather than a full credit check, so this is worth a go before applying elsewhere really.

    Finally, these things are best done in-person. If you apply online and get rejected, you have to start sending letters or calling up to try and explain. If you sit down with someone in a branch you can explain your situation, reasons behind any past credit issues, and ask for certain things to be taken into consideration. You can also gauge loan likelihood before opening an account to save bloating your credit report with dormant/very short-term accounts and credit check logs.

    My advice would be visit your current bank in-person and speak to an advisor. If you're not successful there, speak to other banks in-person. Also bear in mind what financial support your university offers, and the Access to Learning Fund.
 
 
 
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