Banking Blips and Your Credit Rating

Banks, eh? You can’t live without them, although a lot of us wouldn’t mind at the moment. After the recent fiasco involving NatWest, RBS and Ulster Bank, quite a few more of us may be feeling that way. For some, the inconvenience of the ‘blip’ in banking services was nothing more than that. For others it meant an agonising and slightly homeless wait. For others still a “get of jail free card” wouldn’t have gone amiss. Thankfully, for most people the problems caused by the banking blip are all in the past. Or are they? One possible area for future repercussions could be your credit rating. Experian, one of the UK’s leading credit reference agencies has already been inundated with enquiries from those worried about the potential impact on their credit un-worthiness.

Slapped Wrists?
While allegedly rigging interest rates to make oodles of cash for yourself will not, in most cases, count against your credit history, going a few pounds overdrawn will be considered by banks as “misdemeanour”. You won’t get dragged up in front of a parliamentary committee for this type of oversight, but as overdrafts are considered credit agreements any lapses may well turn up on your credit record. Information is shared between banks and credit agencies once a month and small problems like this will be registered on your credit file.

Helpful(ish) Banking
Experian has been proactive throughout this mini-banking crisis and has liaised closely with banks involved in an attempt to ensure that any issues are not recorded against consumers’ records. There is a small chance, however, that some problems have slipped through the net and may be noted on your credit file. However, if this does happen the banks can amend their data and the credit reference agencies will remove the misdemeanour. If you are concerned that your overdraft has been recorded it’s also possible to check your credit record and query the item. Given the circumstances, both banks and agencies should be quickly able to resolve any issues. As information is shared monthly, it’s worth checking your own credit file closely over the next couple of months to ensure that any items that have appeared as a result of the problems are removed.

Discretionary Creditors
The other issue facing consumers is the payment of credit card bills and mortgages. Delays on these may also appear on your credit file. Credit card companies, in particular, have some discretion as to whether or not to record a late payment. Major firms are already aware of the problem and will be willing to help ensure these are not recorded on your file. To be on the safe side, if you haven’t contacted your creditors to explain any delays it’s strongly recommended that you do so now. However, if you have missed payments and they do appear on your file it will still be possible to have them removed. Experian have advised consumers to monitor their credit history closely and to query any records that may be connected to the recent issues as soon as possible. Although in many cases it is down to the individual card issuer to agree to remove these records, under the circumstances most experts agree that the banks will be willing to help out.

For anyone who has missed payments on credit cards, mortgages, loans or found themselves
unexpectedly in the red as a result of the recent banking problems, contacting your creditors and monitoring your credit file over the coming months should ensure mistaken entries are avoided or rectified.

Written by The Spy, 6 July, 2012 - 12:21