Do you have a Natwest Student Account? Read on! (Natwest Bank)

Member Name: bruffyboy

Product:	Natwest Bank
Date:	28/11/08 (965 review reads)
Rating:

Advantages: interest free overdraft

Disadvantages: credit rating well and truly messed up

This review will explain a problem I had with opening a Natwest student account, in the hope that others won't have it themselves. It will not cover the basics of banking, so you'll have to check other reviews for that.

A couple of years ago, I applied for loans to consolidate debt and was turned down. I took the advice on fool.co.uk and joined 'credit expert' to get a credit check. The credit check showed all of my accounts and how they were all up to date with payments, minus one.

The 'bad' account was my student bank account which, when I set it up a few years ago with natwest, gave me an interest free overdraft of £1250. The bank also said at the time that I needed to make this account my main bank account for my cash.

Since then I began using my original account (also with Natwest) for my major banking, and saw on my credit rating I had a rating of 8 for the student account.

The 8 is described as follows:
'The account is defaulted. You have failed to keep to your credit agreement and have not responded satisfactorily to requests to put your account in order. As a result the credit agreement has ended'


I had no letters or details of this (which apparently is not allowed), so I wrote the following letter to the bank:


'Dear Sir / Madam,
I am writing to you with reference to a problem I have run into with my bank accounts. In a recent loan application with Natwest, I was refused the loan due to my credit score being too low. This has also happened recently when I applied for a credit card, and so I used an internet credit rating site to access my credit record. The results show that every one of my lines of credit is in perfect order except my Natwest Student account.

Last week I rang your customer services department to enquire about why my student account was listed as defaulted. The lady I spoke to could only suggest that the issue lay in the fact that the terms of the account were that I paid my wages into it, and as I had not been doing this lately, the account was defaulted.

Firstly, this was an oversight on my part, and in no way deliberate. When I started work with my latest employer in September 2005 I simply had memorised the account details for my current account and gave these to the payroll department.

As I explained when I met the graduate manager in your Plymouth branch last week, I have now finished my degree and teacher training and am earning £XXX a year. My wish is to get a loan with Natwest to consolidate all of my debts from my time as a student (£XXX) and owe just one monthly payment each month. Obviously the request for the loan was rejected on the grounds of my credit score being low, a result in itself of my student account being defaulted by you.

Please could you cancel the default on the account, and return it to its original status with the credit reference agencies? Once this is complete I can then re-apply for a loan with yourselves and am confident I will be approved.

It was a genuine mistake that I made to have my wages paid into the wrong (albeit still Natwest) account, and one I am happy to rectify if it will make a difference.

I have been told that a credit rating default remains on your credit history for six years, and to be unable to get a loan, credit card, or mortgage in this time, due to an oversight on my part, would be very upsetting.

I have been with Natwest for many years, and now I am finally entering the world of professional employment, I see myself buying a house in a couple of years time, again something I would like to do with your bank. If this account defaulting can be rectified I am sure I will remain a happy customer with your bank for the indefinite future.

Should you require any more information to aid you in this enquiry please do not hesitate to contact me.

Yours truly,'



Their reply was this:

'Having looked into what you have said, I have double checked to see if we would register any default on a student account that has not had default procedures issued on them. I am being told that this is not the case. The only time we would register a default would be if we had issued default proceedings on your account and then transferred your account to our credit management services department. I cannot see that we have done this in your case'

The letter went on to ask for a copy of my credit report. I paid for a fresh one with equifax which says exactly the same thing - that all my credit is in order except for a default with Natwest.


So, the bank then got back to me and said they would remove the default (woohoo). I left it a bit, then tried another loan, but was turned down. Yes, it seems that if a default was ever on your account (even if later removed) it blacklists your credit report. So, Natwest have truly screwed up my credit rating.

Thankfully, we later had a lightbulb moment and decided to get rid of our debt through living below our means and saving, and are set to be debt free in February!

My advice is to be very careful with student accounts with Natwest when you already have an account with them. If you pay your wages into one, they will eventually default the other one (which will be in breach of the terms and conditions) and you'll get a terrible credit rating.

Summary: Never have more than one bank account!