Can I get a student bank account with a terrible or no credit history?

Student bank accounts are particularly for undergraduates studying at a university. Going to university is the first phase of you entering the financial sphere. It was the very first time to cherish personal and financial freedom. However, expenses like rent, credit card payments and expenses may soon catch you.

 It is the reason many students require a bank account. It helps them cater to expenses without depending on their guardians for payments. Moreover, it helps build a credit score from scratch. A credit score is the initial ladder to conquering your dreams.  

However, you must hold a relevant bank account before a credit score. Most students are confused about whether they could get one with low credit or no credit history or not. The blog lists everything about student bank accounts whether you can get one despite poor credit.

How does a student bank account operate?

A student bank account is a current account that’s for individuals at a university. These accounts have benefits specific to students. For example, students can get an overdraft without paying interest. It is the same with either “agreed” or “arranged” overdraft. However, you must repay the overdraft once you earn bucks. Afterwards, you can switch to a graduated student account from the undergraduate one.

What are the eligibility criteria for a student bank account?

Yes, there is an eligibility criterion that you must meet to have a bank account. The criteria are easy to qualify for students studying in the UK or pursuing higher education. Let’s check the criteria:

• You are 18+
• You have an unconditional offer from UCAS (Universities and Colleges Admission Service)
• Lenders may ask for a UCAS code to confirm your admission to the course

You may get a student account if you meet these conditions as a regular student in the UK. However, the situation for part-time students may differ.

You must apply for the student bank account before your session begins.  It would then make the process smooth.

Is there any possibility of getting a bank account with a bad credit score?

Basic banks provide the facility to open up accounts despite bad or poor credit history. Moreover, individuals with no credit history can also get one. However, in this case, the individual can qualify for only a basic bank account. It does not provide an overdraft facility.

Factually, bank accounts with no overdraft facility prevent your credit score and reduce your chances of getting into debt. It is sometimes known as no credit check bank account.

Can you be refused a bank account?  

No, it is unlikely for a bank to refuse you a bank account even if you lack credit history.

However, the bank may not check your credit score, and other aspects may impact the bank account approval rate. They conduct a few checks that verify your identity.

You must update your ID and address information. Moreover, having an electoral roll may help you qualify for a bank account. It may also help you get instant cash even with a bad credit history.

How can a bank account help improve your credit history?

Bank accounts do not impact your credit score. Your bank transactions do not show up on the credit report. Lenders conduct a check before approving a loan. Under soft credit check, the credit score remains the same. This is usually the case with a savings bank account.

Here, a hard credit check may impact the credit score. However, it is only because of the unmanaged credit history, not a bank account.

However, a standard bank account, like a current one, can indirectly improve your credit rating. It would not hurt your credit score directly. However, it is unless you do not want an overdraft or a new credit card. You can improve your credit if you connect your expenses with the student bank account and your credit report with the same account.  

Expenses like rent, utility bills, subscriptions and credit card payments significantly impact the credit score curve. Regular payments or payments through direct debits help you build your credit score. Apart from that, you can develop and improve your credit history by:

Individual credit management

You can never build one unless you depend on your known ones for short-term payments. Instead, you can build a credit score if you earn even a little or a part-time income.

Check the liabilities and how much you can save towards the payment. It would help you remain conscious of payments. However, if you cannot save enough and have bills to pay, facilities like loans for bad credit and no guarantor can help.

You can use the loan to pay the bills and avoid expensive penalties. You can get the funds at minimal interest rates with a bad credit loan. You do not need someone to back up for minimal expenses or a bill. However, pay instalments missing no to maintain the credit score.

When a bank account can severely impact your credit score?

Some situations in which bank accounts can indirectly impact your credit score. You must know this before opening and running a student bank account. Here are some situations that may affect the credit score:

1) Overusing overdraft facility

Students find overdrafts the best way to tackle an immediate requirement. However, it may reverse the credit score if used frequently. You must reduce the usage to only emergency expenses. Some lenders view overdraft as a credit or a high-interest debt.

If you use it regularly, it may increase your credit utilisation ratio- which reflects how much of the credit you use. It can impact the credit score. Thus, avoid using overdrafts for short-term use. Instead, check facilities like instant cash loans to finance the emergency. They are affordable and may impact your credit score positively. How? You can boost your credit score by paying the debt in regular instalments.

2) Closing a bank account/ credit card

Closing bank accounts rarely affects the credit score. However, this action may impact the credit score indirectly. If you have a credit card attached to the bank account, closing the account will automatically close the credit card. It may impact your credit build over the years. Thus, never close an old bank account and associated credit cards.  Keep it even if you do not use the card.

Bottom line

Thus, students can get a student bank account without worrying about credit scores. You can get one if you can reveal a UCAS certification to study at the university and meet other eligibilities.  It will help you manage expenses without depending on guardians or friends for short-term needs. Moreover, its financial management is ideal for your credit score. It would help you indirectly to build and maintain one.