Declined for a formal overdraft, what should I try?

Hey all,

DH has been banking with HSBC for a long time now and when I came I got a basic account with them. Later, we added me onto his account and since then we've been pretty good with not going into over draft(we did get into it once 6 months ago when we were really struggling). When I spoke to the person in charge of this process on the phone, he said he doesn't see why we wouldn't get one (I only asked for a £100 one) but five minutes later when he ran a credit check he said it failed.

Do you guys know of any other bank that's more leniant as far as credit scores and giving people over drafts? Or do they all have the same type of check?

They all do their own kind of checks, and basically the products they can offer/sell to you will show up on their screen. 

HSBC is one of the most lenient banks on what they offer to perspective customers. But since all banks are different and handle things a bit differently it wouldn't hurt for you to try to open accounts with other banks and see what they offer.

I would just go into a branch and ask for a current account, and see what kind of overdraft they will offer to you instead of asking for one. They want clients they can make money off of, and someone asking for just a £100 is a client that they won't make money from.

Do you have a job Gibby?  I was refused an overdraft when I orginally opened by Barlcays account, but was granted one as soon as I had proof of employment.

I got an account with Lloyds TSB while I was a visitor (moving here in 2 months, but no formal address yet) and unemployed. I did have a UK passport, but they said my US passport would have been fine, too. They gave me a current account, a savings account, and a £250 overdraft. (None of which I was expecting, given the lack of address/employment!)

Do you have a job Gibby?  I was refused an overdraft when I orginally opened by Barlcays account, but was granted one as soon as I had proof of employment.

No but DH does and we have a joint account. It's just that I was the one who asked for the over draft over the phone.

Equestrianerd, that sounds awesome! When did they do that for you?

I got an account with Lloyds TSB while I was a visitor (moving here in 2 months, but no formal address yet) and unemployed. I did have a UK passport, but they said my US passport would have been fine, too. They gave me a current account, a savings account, and a £250 overdraft. (None of which I was expecting, given the lack of address/employment!)

Huh, I got my first account with Lloyd's TSB when I came over in August, all I could get was a basic cash card.

No but DH does and we have a joint account. It's just that I was the one who asked for the over draft over the phone.

Have your husband ask for it and see what happens.

Equestrianerd, that sounds awesome! When did they do that for you?

This was in November 2009. They may have tightened up their checks since then, though they did just issue me a credit card (when no one else - including cards targeted for people with no credit - would).

When your UK credit report gets checked one of the pieces of information it includes (unlike in the US) is your Electoral Roll history and if you are not registered this is seen as a strike against you. This of course hurts non-EU citizens who cannot register to vote. I used to get declined for credit cards because of this. It is really unfair if you ask me but the system is what it is!

I'd recommend you add a "Notice of Correction" to your credit file at each of the credit bureaus (Equifax, Experian, and Call Credit) explaining that the reason you are not on the Electoral Roll is that you are not a citizen and thus cannot register, but that you have lived in the UK since XXXXX date and can provide documentation of this. You can add the notice online for Equifax and Experian.

Once you do this, when you apply for an overdraft, the bank's computers will no longer be able to assess your credit rating - instead a human being has to perform the credit check and take into account the notice you added. Since I put such a notice on my credit report I have been approved for overdrafts with 2 different banks and also a credit card.

Of course there are other reasons you might not get approved for an overdraft but this suggestion might help some.

Thanks for the advice guys. We'll give these things a try.

Hey all,

DH has been banking with HSBC for a long time now and when I came I got a basic account with them. Later, we added me onto his account and since then we've been pretty good with not going into over draft(we did get into it once 6 months ago when we were really struggling). When I spoke to the person in charge of this process on the phone, he said he doesn't see why we wouldn't get one (I only asked for a £100 one) but five minutes later when he ran a credit check he said it failed.

Do you guys know of any other bank that's more leniant as far as credit scores and giving people over drafts? Or do they all have the same type of check?

Join the UK site http://forums.moneysavingexpert.com/ (free to join). There are many people over there with a less than perfect credit score and they will be able to tell you the best banks to use for your situation. Although I don't think using an overdraft to live on ( if that was what you were intending to do) is the cheapest loan rate. The good folks on moneysaving will be able to guide you.

Don't be put off by HSBC as they are well known to be cherry pickers and are one of the few banks that didn't need a UK government bailout.

It might help you if you look at some of the other boards on the above site too, such as the old fashioned money saving, debt free wannabe, up your income, for futher help?

Don't forget to join a cashback site, like www.topcashback.co.uk and use them for your purchases. If you change your gas and electric providers, use the topcashback site for that too. My brother changed his electric/gas provider and ISP and got paid £120 and £130 respectively, through this site. The people on moneysavingexpert, utilities board, will be able to guide you on that too.

Thanks Peter that's very helpful. We weren't intending on living off of the overdraft, just using it as a safety net really. I applied for it when I did because rent was coming up and DH's paycheck didn't come at that point yet. It's been sorted now but it would be nice to get an overdraft anyways.