Have bank errors screwed up your credit worthiness?
Banks are one of those necessary evils. While mattress savings may seem attractive, with all the online payments and money laundering regulations placed on good old cash, a bank account is generally a must. However, as we have seen recently with Natwest, RBS and Nationwide, the people in charge of your money are not infallible and can make serious screw ups with your money. RBS announced last week that it provided for £125m to cover the expected fallout from their system malfunction.
Now, however, it seems that the banks’ cock ups could shaft affected customers for a second time. Where bank errors sent customers into the red, meaning other payments were subsequently turned away or an unauthorised overdraft was noted, the missed payment may turn a blemish-free credit record into a blotted copy book. And that is really bad news in the current credit climate.
Nigel Stockton, from mortgage brokers Countrywide, shook his head at this latest turn of events, saying "in the current environment, I cannot emphasise enough that banks want a totally unblemished credit reference. We have had clients refused mortgages and the reason given was a late payment even though they have never actually missed a payment.”
But what can you do if you are affected? Neil Munroe from Equifax said “if someone is concerned that a payment hasn't been received they should check any accounts to which payments should have been made to see if they have been received. If not, they should contact the lender to advise them of the reasons for delay.”
You can also obtain a copy of your credit record to check for flags of late or missed payments that were not your fault. Note that you do not need to sign up for a credit check service to obtain your credit history, but can instead request it online or in writing from one of the credit reference agencies for a nominal fee of £2. If you do decide to purchase an immediate report and credit score, make sure you claim cashback to offset some of the £15ish cost.
If there are faults noted on your account, your statutory rights allow you to dispute inaccurate information on your credit file and have errors corrected within 28 days. However, if the payment was missed, or late, it would be difficult to argue that any recording of this fact was in error.
You can formally request a note be added to your credit file, explaining the reason for the failure, but this will not be seen by companies who just use a credit scoring system. This means that there could be cases where the bank error denies customers future credit. If you think this could be you, we’d love to hear about it and to investigate exactly what the banks are going to do about it.