Home buyers warned as credit scores hit by TSB failings

Home buyers warned as credit scores hit by TSB failings

Customers of TSB Bank are still suffering disruption from the bank's botched IT upgrade, with some clients claiming they have seen their credit score drop "significantly" as a result.

One TSB customer, who wishes to remain anonymous, claimed the bank’s ongoing IT struggles have caused her credit rating to drop by almost 100 points.

The customer had contacted her credit agency in August, after being littered with offers for credit-building products, when she found her credit score had dropped 86 points in one month, pushing it from 'good' to 'fair'.

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She was then told her current account provider TSB had failed to update her status since April.

Banks and other credit-linked entities typically update agencies on a customer's credit status on a monthly basis, feeding into the saver's overall credit score.

When approached by FTAdviser TSB confirmed that as a result of its IT migration issues earlier this year, customer credit files had not been updated with credit agencies Equifax, Experian and Call Credit.

But the bank said it had made the decision to not to proactively contact account holders directly due to the perceived small scale and impact of the issue.

A TSB spokesperson said the bank has been working to rectify this problem and has made "good progress" to date, claiming the issue was almost rectified and August data was expected to be normal.

The spokesperson added while the bank takes the issue very seriously, failed current account updates should not have caused a detrimental effect on customer’s ratings as the bank was only "one small part of the puzzle" with regards to credit scoring.  

The customer said she holds only one current account and one credit card and the sudden drop in April coincided with the bank's reporting issue, which had started in the same month. There were no other negative factors on the report, her credit agency said.

TSB confirmed that a small number of customers have been in touch to report the same issue.

Daniel Bailey, mortgage specialist at Middleton Finance, said whilst it was difficult to determine the exact effect of TSB’s update failures, the delays would certainly have had some sort of impact on credit scoring, and acknowledged 100 points, if true, was a significant drop.

Mr Bailey said: "TSB have a responsibility to let consumers know if the delays may have affected their credit score and any current account holders with concerns should contact the bank, as the onus is now on them to rectify the score."

Mr Bailey advised individuals should check their credit scores regularly, as computers can make mistakes which can lead to credit issues later in life.

He said: "In particular, first-time buyers must not just presume they have a good rating and should proactively build a good credit score, checking it regularly, as it will have a lasting impact across their lives."

The TSB spokesperson said: "We are sorry that our customers have seen a delay in their credit files being updated -  we are working really closely with the credit reference agencies and are making very good progress, so expect to see everything back to normal soon.