MoneySavers have been surprised to find applying for a savings account with Ulster Bank could mark their credit file and potentially affect their credit score.
The RBS-owned bank has been performing hard credit searches, which mark your file and are visible to other lenders, on some new and existing customers applying for its market-leading eSavings account.
While Ulster Bank does state in its terms and conditions that "we may access and use information from credit reference agencies", it's extremely unusual for those applying for a savings account to be subject to a hard credit search – these are typically reserved for credit card and loan applications where the customer is asking for credit.
Too many hard credit searches can make it harder for you to get credit in future, especially if many are done in a short space of time. To check your credit score, it's worth joining our free MSE Credit Club.
'I was hard-searched which made my credit score drop, so be careful'
MSE Forum users who have been discussing the savings account said they were surprised by the searches.
Forumite Frannie B said: "When I opened the eSavings account, I was hard-searched which made my credit score drop, so be careful."
Forumite brianBarrett said: "In spite of this being a savings account, they still perform a full credit check IF you are new to Ulster Bank.
"Note that this was the case even though I am already a customer of RBS-NatWest. So a credit check, when the account cannot give you credit. This credit check has had an effect on my credit profile, according to Experian."
BrianBarrett said that after he made a complaint, Ulster Bank agreed to wipe the search off his credit file.
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What does Ulster Bank say?
A spokesperson for Ulster Bank confirmed some customers may face a hard credit search when applying for the savings account, which at 1.25% AER variable is our best-buy easy-access savings account.
He said: "As outlined in our terms and conditions, we work with credit reference agencies to keep customers and the bank safe and secure when customers are applying for new products. The fraud checks that credit reference agencies carry out can leave a hard search on a customer's credit score, similar to a credit check."
The spokesperson claimed the credit check is to help protect the bank and customers from fraud, not to decide whether or not to give you the savings account. However, it's not clear why a hard search is required for this – and again, it's extremely unusual for those applying for a savings account to be subject to a hard search.
We've asked the Financial Ombudsman Service what its stance is on hard searches being performed on those applying for a savings account, and we'll update this story when we hear back.