Credit rating damage but it's not my fault - what now?

helen glaberson
By Helen Glaberson

I do everything I can to keep a good credit rating but my bank failed to transfer some cash leaving me with a missed repayment on my record.

How do I tell lenders that it wasn't my fault?

You can play by all the rules when it comes to keeping a clean credit rating but, sometimes, a report is tarnished by reasons outside of your control.

Such credit rating concerns came to the fore when an RBS software glitch resulted in delayed transactions throughout the banking Group, which includes Natwest and Ulster Bank.

On a smaller scale, IT mistakes that cause late payments have become almost commonplace.

And it doesn't stop there. Linked accounts, for example, could have an influence on credit worthiness that has nothing to do with your behaviour.

We'll look into all of these issues - and when, if ever, it's time to just accept the blame - in this guide.

Late payments: what to do

As we noted above, late payments are perhaps the classic example of a credit report 'black mark' that can be taken out of your control.

1. Check accounts

As always, the best advice is to take as much action as possible before a problem arises.

Ensure that automatic payments are set up with enough time for the amount to transfer and, if a problem seems likely, check any accounts to which payments should have been made to see if they have been received.

If a payment has not gone through contacting the lender to inform them of the reason for delay can often head off the problem.

2. Check reports

The Payments Council advises those who fear they might have been affected by late payments to request a copy of their credit report from one of these three credit reference agencies: Call Credit (reports under the Noddle brand), Equifax and Experian to cover at least the next three months.

At the time of writing, RBS is still promising to reimburse anyone affected by its IT glitch for such reports, if they're requested by October 31.

Find out more about accessing credit reports cheaply or for free in our full guide.

3. Notice of Correction

If a bank or other financial lender declines to amend a problem that you are certain is not your fault, the final step is to add an explanatory note to your credit report.

This is known as a Notice of Correction, a 200 word statement placed next to the offending error for potential lenders to see.

Lenders are obliged to read this note and bear in mind that it could slow down any decision from such lenders on whether to offer a product or service.

Influence of others: what to do

As we said above, though, your credit rating worries may not lie in a bank glitch but with another person and their financial behaviour.

When people are financially linked because they share responsibility for a debt or current account, lenders can check both individuals when one applies for new borrowing.

If one party is in debt or constantly missing payments, then, both are affected.

We've looked much more deeply into this problem and its solutions in this article but we'll just go through the strategy here, in brief.

Get unlinked

People can financially unlink themselves fairly easily.

Once joint accounts are closed, they could still be listed on a credit file, however, so it could be a good idea to get a credit report carried out to check this.

It's possible to make a credit application completely independent with a Notice of Dissociation from a credit reference agency.

Applicants need to prove that they have no active financial connection with the person.

If successful, the notice will then filter out the information about the third party so potential lenders won't be able to see it.

Fraud: what to do

The definitive example of a credit report problem that is not your fault is a case of fraud.

Application fraud, a criminal applying for credit using someone else's identity, is, for example, a growing problem.

Luckily, financial services are fairly adept at sorting fact from fiction to protect the victims of such fraud.

1. Report the fraud

From a consumer perspective, then, the most important thing to do is to make sure the fraud is reported so that banks can take action.

Our guide to the rights for victims can tell you what the action will be and how banks view personal liability in fraud cases.

2. Take preventative measures

It's also worth taking preventative measures to ensure that fraud isn't repeated.

In cases of identity theft, for example, it can be worth changing passwords or flagging your credit report so that lenders make extra effort to check identity before extending credit to individuals with your details.

Our identity theft guide from CIFAS has more information on how to flag reports.

Accepting the blame

Finally, it's worth noting that although banks and other institutions can negatively affect consumers' credit reports, they won't necessarily take the blame.

In the case of late payments, for example, banks often warn that inter bank transfers could take some time.

If, after being pre warned, it is so slow that a payment is missed, the bank will rarely accept liability.

In such cases, it's often best to just accept the blame and move on with improving credit history.

Assessing the damage

As we noted above, accessing credit reports is often the best way to assess the damage.

Our credit rating diet aims to help get finances get fitter.