My credit score has bombed because I made a genuine mistatke

pkwadders

Hello to All,

I recently checked my credit score which had been at 976.  To my horror it had dropped to 492!

I realized I had mad a big mistake. In February I made a balance transfer to MBNA as they offered 0% interest until March 2024.  What I hadn't done was set the account to minimum payment so they had tried taking the full amount which I'd missed and for 3 consecutive months.  Why would I make a balance transfer paying 2.5% if I intended to clear it immediately?  

I contacted them immediately bringing the account up to date and contact Experian to learn this would take a year to get anywhere near back on track.  Clearly this was (my) error but most certainly not intended.  I'm a good customer but none will touch me for a least one year now.  Is there anything I can do to overvide this?

Thank you in advance. 

CliveOfIndia

Since your score is seen by no-one except you and the CRA, there is no reason to be horrified when it changes.

Missed payments, however, will have a negative impact on your credit history.

Are you saying that you set up a direct debit to pay the full amount, and this bounced due to insufficient funds in your account?  Or did you intend to pay the minimum amount manually and simply forgot about it?  If the latter, then if you'd phoned them up as soon as you realised and made a payment, there's a good chance they would have been lenient, accepted the payment and not reported a late payment to the CRA.  But having left it for 3 months, I'd be very surprised if they were able to remove the late payment markers now.

All you can do now is carry on making payments on time.  Late payment markers will remain on your file, but will diminish in significance over time, especially if superseded by plenty of positive marks.

penners324

You didn't notice the DD for card wasn't going out? 

There are banks that send notifications of DDs about to be taken....

Fighter1986

You will have had notifications from your bank and MBNA about each missed payment as soon as they happened so you had ample opportunity to correct the issue. You also have a contractual obligation to check these things regularly - check your credit card statements every time they are produced, make sure any automated payment you expect to be taken is shown correctly on the statement, and does actually leave your bank account.

Since you failed to exercise any due diligence whatsoever, the late payment markers are absolutely an accurate representation of what happened and need to be seen by other lenders so that they are aware.

paul_c123

There is some leeway in making an MBNA credit card payment. So long as you actually make the minimum payment before the next statement is produced, they won't record it on the credit file as a missed payment. With a payment date typically 20 days after statement date, this means there's 10 days to sort out an issue such as this, where a DD is unpaid. But it relies on being vaguely aware of when the credit card payment would come out, and/or notifications sent from the relevant bank(s). 

I don't know who your current account provider is, but I believe most would have sent you a notification of a DD which went unpaid due to insufficient funds in the account. And MBNA would have sent a notification they were about to collect the DD (with the amount), AND a notification it failed. These are not possible to turn off (unlike eg marketing texts) because they are account management alerts. Obviously you'd need to ensure MBNA has your correct and current mobile number. They also do email notifications.

So, in that 10 day window there's 4 chances: 1) just knowing and checking yourself (eg make a calendar entry to check it), 2) SMS from MBNA saying they'll collect, 3) SMS from MBNA saying DD failed, 4) SMS from your current account bank saying DD failed. A failed DD doesn't stop future attempts to collect on that DD either. So you must have had (at least) 9 notifications. I think there would have been more, for "account in arrears" too.

pkwadders said:

 I'm a good customer but none will touch me for a least one year now.  Is there anything I can do to overvide this?

Thank you in advance. 

Are your contact details (and address.....you'd have got letters too) up-to-date? If not, then that's a big red flag for banks too. 

MrFrugalFever

Unfortunately you will have these late payment markers on your file (visible to other lenders) for 6 years now. MBNA will see them visibly for far longer.

At worst, it will tarnish your relationship with MBNA and prevent you from getting prime credit for 6 years, at best, you'll start getting prime credit offers in a couple of years.

1 missed payment is generally accepted as just a blip but 3 is a significant impact to lenders and will almost certainly result in a decline by all.

paul_c123

MrFrugalFever said:

............ your relationship with MBNA .............

with Lloyds Banking Group

Brie

Just to put a positive on this....well yes, it will be on your credit history.  But when someone looks at that (experian or transunion) they will see a yellow month (first DD missed) & then 2 red ones.  Presumably this has now been sorted so any subsequent months will show as green.  It's a simple traffic light system so easy to spot where there are problems and, more importantly, where those problems have been resolved.  

Frankly I would guess that the vast majority of people with CCs have missed a payment at some point.  I certainly have and more than once.  It's done me no real lasting harm as it shows as a blip on my credit history as opposed to someone who has serious debt issues.  The longer you are showing as responsible (aka green) the less relevant this will be.  Yes it's annoying and setback, but it's a relatively minor one and one that will fade into the past fairly quickly.