Emma's journey: How upgrading bank account can impact your credit score

Aug 23, 2017

Hi everyone!

I’m Emma and I’m blogging about how my credit profile and score change as well as the things I learn about the money world while I go through my Loqbox journey.

Today I’m going to tell you about my experience of trying to upgrade my bank account and how it ended up pulling my credit score down by more than 120 points!

Here is a screenshot of my credit score before I went to my bank to apply for a better bank account. You can see that my score was 373:

And here it is after the saga of applying for a better bank account:

You can clearly see that my credit score dropped by a whopping 123 points!

What happened?!

When I went in to upgrade my account (to one with a credit card included) my bank told me that they would have to perform a credit check- which I agreed to. Weeks later I found out that because my credit score was not high enough, my bank would not upgrade my account to the one I wanted. Instead, they offered to upgrade me from a basic account to a current account (no credit card included in the account) and told me that they would have to perform yet another credit check.

A week or two after I had my current account I went online to Clearscore.com to check my credit score and was astonished to find that it had dropped so much! When I went to find out what had caused it to drop so much I saw that my bank had not performed 2 credit checks (they show up as ‘Hard Searches’ on your credit report) but instead had carried out 4! These hard searches were showing up on my credit report as credit applications! So even though I was purely applying for a better account, my credit report now makes it seem as if I am desperate for credit.

Applying for a better account did not affect my credit-worthiness so why did my credit score fall so much?

The fact that my credit score fell so much when my credit worthiness hadn’t changed at all underlines one of the many flaws in our credit scoring system. Because my bank carried out four hard searches which shows up as four credit applications, my credit report makes it seem like I’m a risky borrower who is mismanaging credit. This is why my credit score fell by so much.


Any application is likely to drop your score a little, as will taking out almost any new financial account such as a loan, credit card or mobile phone, but that’s OK. When you open a new account your score dips because you haven’t started managing it yet, which means that lenders don’t know if you will manage it well or not. That’s to be expected and is totally normal. As you make your payments your score should start climbing again. The thing to watch out for are hard searches or multiple hard searches for products or accounts you don’t get, as these can make you seem desperate which can put lenders and financial institutions off.

Make sure you understand the consequences that upgrading your bank account can have on your credit score before you go through with it and make sure you speak to your bank to double check how many hard searches they will perform. Regardless of whether you are applying for an account with or without a credit card, they will have to perform a hard search which will show up as a credit application on your credit report and likely drag down your credit score.

This also underlines just how important it is to have a credit payment history. If my bank of 7 years isn’t willing to give me a better account then how can I expect any other financial institution to? Thankfully I’m already using Loqbox and am on my way to building a credit payment history.

But I still had questions…

How long will these hard searches show up in my credit report for? How long will it be before my Loqbox monthly payments begin to overshadow these hard searches so that my credit score can begin to rise? Keep following me through my Loqbox journey to find out!

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