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Bank IT meltdowns impacting customers’ creditworthiness

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Written by: Emma Lunn
15/04/2019
One of the worst years for bank IT outages is still affecting consumers by having a negative effect on credit reports.

Data from credit checking service ClearScore found that two-thirds (64%) of consumers who checked their credit report after a bank IT failure uncovered errors that could impact their creditworthiness.

Data from the Financial Conduct Authority shows that major UK banks suffered more than one IT shutdown every month in 2018, with 41 blackouts in just nine months at Barclays and 37 at Lloyds.

IT outages can mean missed payments that are not the customer’s fault and scheduled payments which fail to go through. These events can have a negative impact on an individual’s credit report and affect their ability to be accepted for financial products in future.

ClearScore said a missed payment can be one of the most negative factors on your credit report, and multiple missed payments can lead to a “default” – the most damaging factor possible.

The research also warns that many more mistakes could be going under the radar. Just a quarter (27%) of those who had a major IT outage at their bank checked their credit report for potential mistakes afterwards, and a third (31%) of Brits have never checked it at all.

ClearScore chief executive office and co-founder Justin Basini said: “When banks suffer IT meltdowns consumers don’t just suffer the immediate inconvenience of not being able to access their account; there can also be lasting damage if payments are missed.

“It might take several weeks for a missed payment to show up on your credit report so many only found out they’ve been a victim when they’re turned down for a financial product like a mobile phone contract or a mortgage. I’d urge everyone to check their credit report when they hear about major IT outages at UK banks so that you can clear your name if anything is missed and it wasn’t your fault.”

What to do if you spot an error

If you spot a mistake on your credit report, the first thing you should do is let the company or lender know and ask for the error to be amended. Once the mistake is corrected, the company should update all the credit reference agencies it uses. Consumers can also raise disputes directly with credit reference agencies.

If a mistake cannot be fixed, you can add a “Notice of Correction” to your credit file. This is an explanation of up to 200 words explaining what happened and why it doesn’t reflect your normal financial behaviour.

A Notice of Correction can also be used to explain any negative marks on your score if, for example, a period of ill-health caused you to fall behind on your bills.

 

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