Martin Lewis has warned Nationwide, Santander and NatWest banking customers of a potential risk as Christmas grows closer.
The Money Saving Expert founder reminded people to be aware that despite lucrative cash bonuses for changing to a different bank, hopping from one company to another could impact on your credit score – in a negative way.
Nationwide, NatWest, Lloyd’s, Santander, and First Direct are tempting new customers with free cash incentives before Christmas, offering windfalls ranging from around £150 to over £200 – a potential welcome boost for the festive season, reports the Mirror.
The financial guru, known for his savvy advice, stressed that serial switching can do more harm than good – especially at popular banks like Santander, Nationwide, and NatWest, where tempting cash incentives to move banks are on offer.
He explained, “If you do one switch, it’s an application on your credit file which has a very minor, short-term negative effect. 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.”
Mr Lewis, also advised prudence if set to buy a house in the near future: “So I wouldn’t switch my bank account if I had a mortgage application during the next two months.
“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.”
Money -saving maestro Mr Lewis hammered home the message: “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 further advised, “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.”
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