Help! Adverse credit score due to bank error (my error too but I'm the one who's suff

jumpingdemon

Dear All,

I would be enormously grateful for any advice on the below matter. I have taken it to a branch manager who claimed that he had passed it on in memo form to his seniors, who had contacted Experian to be told they could do nothing. I then contacted Experian who subsequently reported that the bank will not back down on their version.
I feel that the mistake was mutual and that the bank acted on my behalf but without my permission, yet I am being penalised. It is very frustrating because everyone I speak to appears to sympathise with my position, yet no-one appears to be able to help. Any advice would be very warmly received! I enclose below my dispute which I logged on Experian.

"I recently applied for a credit card and was turned down. I have subsequently checked my credit file and find that HSBC have entered a warning on March and April 2009.
I believe this is a bank error and when I contacted them about this, they promised to amend my file. However, they have subsequently told me that they have contacted yourselves (experian) who have told them that this cannot be done - they have therefore not amended the file. I dispute both the initial warning and their subsequent treatment of my case and my reasons are below.

I hold two bank accounts with HSBC:
One is a graduate account with around £2000 overdraft facility, £500 of which is interest free. I pay monthly into this account and have reduced my overdraft to around £50 but have kept the full facility in case of emergencies.
I also have another account which I used to use to manage my bills but which has been inactive for several years since I switched my current account away from HSBC. This account has a balance of zero and no overdraft limit.
Both accounts have chequebooks.

In around November 2008, I needed to make a cheque payment, as I could not find my current account chequebook, I used a cheque from what I thought was my HSBC graduate account. The payment seemed to go through without any problems and I thought nothing of it.
Some time later, I opened some HSBC post which I had overlooked and found to my surprise that it was informing me that I had gone over my limit on my Bills account and had consequently defaulted on payments.
I was shocked that HSBC had made a payment from an account with a balance of zero and no agreed overdraft limit. I rang them immediately and transferred the money from my graduate account, thereby settling the balance and thought nothing more of it.

However, this mistake - for which I believe the bank should share some responsibility, is now adversely affecting my credit score. I do not believe that it is indicative of my ability to manage credit - I have a previously unblemished record. I also would not be in this situation if the bank had refused to authorise payment, which they should have done on an account with zero balance and no overdraft limit.

I would be grateful for your assistance as I do not feel that the bank is responding adequately to my concern."

Many thanks to all you moneysavingexperts

jambosans

I'm inclined to agree with Experian. Making a payment without funds is regarded as an "informal" (or words to that effect) request for an unauthorised overdraft under the terms & conditions of your HSBC account. Therefore HSBC can and will make payments if you have a "zero balance" (it has been contractually agreed).

It's definitely not bank error.

There might be something you can do about the default, but I'm not clued up enough on credit reference agencies to help. HSBC have reported fact to Experian, which is solely your error, not HSBC's.

jonesMUFCforever

I agree with the bank - it might have been a lot more embarrassing for you if they had bounced the cheque.

jumpingdemon

Thank you very much. Is there anyway that I can flag this up on my credit report as a mistake on my behalf rather than an inability to pay and would that have any bearing on future lenders inclination to let me borrow?

stclair

You can add a notice of correction to your credit report.

A Notice of Correction is a short (up to 200 words) explanatory note you can add to an entry on your credit report to explain the background to that information. Anyone searching your report in the future or who has seen it in the previous six months will see the Notice of Correction, and they must take account of it when you apply for credit.

jumpingdemon

Hi, I've tried this but it didn't work - they said I'd have to take it up with the bank. Not quite sure if they realised in was an N.O.C though

jambosans

On the back of stclair's helpful post (as I mentioned, I know very little about CRAs), I found information on Experian's website:-

What is a Notice of Correction?

A Notice of Correction is a short (200 words max) explanatory note you can add to an entry on your credit report to explain the background to that information. Anyone searching your report in the future or who has seen it in the previous six months will see the Notice of Correction, and they must take account of it when you apply for credit.

How do I add a Notice of Correction to my credit report?

Use the “Query Your Report” tab to send us the text for your Notice of Correction (200 words max), quoting the entries you want us to add the note to. Alternatively, you can post the text to us at the following address.

Experian Ltd
PO Box 9000
Nottingham NG80 7WP

We’ll make the necessary changes to your report. Any note we believe to be defamatory, libellous, incorrect, or frivolous may be referred to the Information Commissioner for arbitration.

We also recommend you contact the other credit reference agencies (Equifax and Callcredit) to notify them of the circumstances you want to explain, as the information we hold is not necessarily the same. We will provide them with any statement you add to court judgments

Sorry to quote the entire thing, but it's relevant to your post. Below is the link to where this information can be found (there's also a N.O.C. example):-
http://www.experian.co.uk/consumer/faq/AR5.html

chambta

stclair wrote: »

You can add a notice of correction to your credit report.

A Notice of Correction is a short (up to 200 words) explanatory note you can add to an entry on your credit report to explain the background to that information. Anyone searching your report in the future or who has seen it in the previous six months will see the Notice of Correction, and they must take account of it when you apply for credit.

But bear in mind that to lenders a 'notice of correction' on a credit file is sometimes interpreted as a bad thing immediately.

Certainly credit applications that flagged up such a correction were automatically subject to further additional underwriting and probable decline.

In many cases the original 'crime' wouldn't have caused the application to decline.

jonesMUFCforever

I agree with Chambta. It was your mistake not the banks - accept it and move on.

Taylor_H

Great information to know. Many people will be benefited by this post. There are so many financial agencies to assist people with the needs regarding the credit scores. These agencies will guide people by giving accurate information to the people regarding how to improve your credit scores.