Bank IT failures damaging credit scores of thousands of customers

16 April 2019

Bank IT failures are not just proving to be a huge inconvenience for customers, they are also damaging their credit scores, new research shows.

Credit checking service ClearScore says that 64% of customers who checked their credit report following a bank IT failure have uncovered errors.

These include missed payments that weren’t their fault which could impact their ability to borrow or take out new financial products.

Over the past year, millions of customers at banks such as Barclays, HSBC, NatWest, RBS and TSB have been hit by IT failures, leaving them unable to access their accounts.

UK banks and financial service firms recorded a 138% increase in technology outages in the year to October 2018, according to the City watchdog the Financial Conduct Authority.

When outages occur customers cannot access their accounts, and in some cases scheduled bill payments do not go through.

These missed payments are recorded on their credit report and can make it more difficult for them to take out financial products in the future, such as a mobile phone contract or a mortgage.

A missed payment can seriously affect your credit score, with multiple missed payments leading to a default.

It might also have further negative consequences – for example, if the late payment fees incurred from the missed payment took you over your agreed credit limit, this would damage your credit score even further.

ClearScore also warns that many more mistakes could be going under the radar. In its survey of over 2,000 people, it found that just 27% of those who have heard about a major IT outage at their bank checked their credit report for potential mistakes afterwards, while 31% of Brits have never checked it at all.

Justin Basini, chief executive of ClearScore, says: "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.”


Last year, 1.9 million TSB customers were locked out of its online service and banking app after an attempt to migrate customers to a new computer system was unsuccessful.

Barclays customers were also left unable to log in to their accounts after technical problems in September. Customers at RBS, NatWest and Ulster Bank have also had issues.

When outages occur, customers have been left unable to pay their bills, sometimes leading to late payment charges and penalties. This has left some people unable to complete important transactions, such as a buying a house or paying for a wedding.

In some cases, these outages are happening because banks are migrating over data from their old legacy systems to a new platform.

Legacy systems at banks were originally set up for branch banking and are sometimes up to 40-years-old. Banks have also bolted on technology upgrades to existing systems making them more complex, so when data is transferred over problems can occur.

If you have been unable to access your account as a result of an outage, you can make a claim for compensation by contacting your bank.

Alternatively, if you are unhappy with your bank you may also want to consider switching.

How to fix credit report mistakes

Get a notice of correction

If you believe there’s an error on your report but you can’t get it fixed, then you can add a notice of correction to your file.

A notice of correction is an explanation of what happened and why it doesn’t reflect your normal financial behaviour. It is not necessarily just for bank errors and can also be used to explain any negative marks on your score, such as a period of ill health.

Talk to the company

If you spot a mistake, the first thing to do is let the company or lender know. They may well be happy to amend it immediately or you may need to go through their official complaints procedure.

Either way, they should send updates to all the credit reference agencies they use, so you won’t have to submit a request to each individual agency.

Contact your credit report provider

If you think there is an error you can raise a dispute with a credit scoring agency which will look to correct the issue.

All credit scoring agencies should have a similar process for putting mistakes right, so a few minutes of proactive emailing could fix the issue fast.

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