Money Saving Expert Martin Lewis has fired off a warning to those tempted by the bank-switching bandwagon, cautioning that it might impact your credit score. With Christmas on the horizon, banks like Nationwide, NatWest, Lloyd’s, Santander, and First Direct are dangling juicy cash carrots, with free money offers ranging from £150 to a hefty £200 to entice new customers.
The financial whizz, famed for his money-saving tips, highlighted the potential pitfalls of frequent switching particularly at high-street favourites such as Santander, Nationwide, and NatWest, which are luring in switchers with hard-to-resist cash bonuses.
He clarified, “If you do one switch, it’s an application on your credit file which has a very minor, short-term negative effect.” However, he cautioned against getting carried away: “Lots of those in a short space of time can be an impact. Banks also like to see evidence of longevity, so that’s also slightly negative.”
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MSE’s head honcho, Mr Lewis, further recommended exercising caution for those eyeing up a house purchase soon: “So I wouldn’t switch my bank account if I had a mortgage application during the next two months.”, reports the Mirror.
The money-saving expert warned: “Switching very regularly to make money can have a bigger impact. If you’re rejected, it could be for one of many reasons, for example… you’ve got a poor credit record, you’ve had past dealings with that bank where you’ve missed payments or the bank doesn’t think you’ll be a profitable customer.”
He added: “Don’t assume because one bank doesn’t want you, none of the others will. All the same, don’t just apply everywhere as it can do more damage to your credit record.”
He also dished out some extra advice, urging individuals “Instead, you need to do two things first, ask the bank why it rejected you. Its answer may be vague, but it should tell you if you were rejected because of your credit record.”