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Does having multiple current accounts affect your credit score?

By B贸 | December 17th 2019

Having a second current account can be a really good idea. Modern mobile banking apps like B贸, give you instant notifications when you spend, are designed to help you see where your money is going and help you manage your spending better.

However, you might have heard rumours that having multiple bank accounts may affect your credit score - and are thinking twice about whether it's worth getting a second account.

What is a credit score?

Your credit score is simply a score (often out of 1000) used by banks and other lenders or underwriters when they decide if they are going to lend you money. Having a healthy credit score is a good thing, so it is certainly right to consider if opening multiple accounts will affect that number.

So, does having multiple current accounts affect your credit score?

The short answer is 'no'

Having numerous current accounts is not on its own going to cause your credit score to dip. When you open a current account or savings account, the bank or organisation you are applying to will check (often with a credit bureau) that you have a history with them - i.e. they have a record of you living at the address you've given, whether you're on the electoral roll etc. This is not a 'credit check' but it is a check to validate information provided.

The fact is, having two or three current accounts is perfectly normal and those that don't have an overdraft (debt) attached to them, such as B贸, won't impact your score at all as you won't be being credit checked in the background.

The long answer is 'maybe'

Although having multiple current accounts does not affect your credit score on its own, there are a couple of circumstances where it may have an effect:

  1. You open several accounts with overdrafts around the same time
    If you open numerous current accounts with either overdraft facilities you don't use or leave outstanding overdraft debt lingering. that could affect your credit score since an overdraft is a type of debt. If you apply for lots of current accounts with overdraft facilities as part of them, in a short period of time, all those extra checks will potentially affect your credit score.
    Sadly, in the UK many people live in the overdraft of their main account - but that's not normally a serious problem in itself if it is cleared each month. However, if you have many accounts which you are not able to pay off or have overdrafts with numerous different bank, these will show up.
  2. You apply for several different types of accounts at the same time
    If you apply for lots of current accounts, savings accounts or of course lending products, such as credit cards, in a short period of time, all those extra checks will potentially affect your credit score. This also applies if you applied for a combination of insurances. mobile phone contracts etc. all at once, as all these 'contract' type products have elements of lending associated with them that will do credit checks in the background.

Overall credit scores are all about risk - if you suddenly apply for lots more credit in a short space of time, whatever form it's in, it will be likely to affect your credit score.

What do credit agencies know and check?

Each of the UK's four credit rating agencies come up with an assessment of your credit 'health' based on slightly different information and calculations. However, they all essentially check:

  • Personal Information - this is your name, address, salary, whether you are married or single if you own your home or rent, etc.
  • Credit History - this is about whether you have paid your debts on time or have multiple loans
  • Enquiries - whenever you, a lender, landlord, insurer or debt collection agency looks at your profile it makes a small footprint. If you have lots of credit inquiries over a short period of time then it suggests you are desperate for credit which could raise eyebrows
  • Public records - if you have gone bankrupt, have County Court Judgements against you or are not on the Electoral Roll, your credit score may go down

The point is, credit rating agencies do not consider the number of current accounts you have when compiling your credit score. So, you could 100 debit cards and it wouldn't technically change a thing.

Having a second current account like B贸 won't affect your credit score

The fact is, having two or three current accounts is perfectly normal and those that don't have an overdraft (debt) attached to them, such as B贸, won't impact your score at all as you won't be being credit checked in the background.

You could even use a second account, like B贸, to help you manage your spending and stick to a budget. This could also help you manage your spending better and build a buffer, to avoid debt and its painful symptoms; interest, fines and fees!

B贸 is part of National Westminster Bank Plc (鈥淣atWest鈥), registered in England and Wales (Registered Number 929027). Registered Office: 250 Bishopsgate, London, EC2M 4AA. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. NatWest is entered on the Financial Services Register and its Register number is 121878. The Financial Services Register can be accessed at www.fca.org.uk/register. NatWest's registered VAT number is GB 243852752.

B贸 is protected by The Financial Services Compensation Scheme (FSCS). Read more here.

* If you have accounts with B贸 and NatWest, the maximum you would be able to claim across all accounts combined is 拢85,000.

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