Can Banking Glitches Affect My Credit?
One of the fundamental reasons for having a bank account is to have your wages paid into the account, and pay your bills and accounts out of the account.
In the banking world of today, you need a bank account to get paid by your employer, and also to pay your bills. Almost all of today’s bills are paid by direct debit or standing orders. The money simply goes in each month, and also the money goes out each month.
As we move closer to being a cashless society, we also use our debit cards more and more, especially now that they are contactless, to make purchases. Even if it is a cup of coffee at the corner shop, we use plastic, and not cash.
Then there is our use of online banking and mobile banking applications.
It is the digital, Internet, mobile age, and now the use of these apps and going online is how we bank. Gone are the days of going into a bank branch on a regular basis to discuss or check on our accounts.
So if the fundamental reason for a bank account is to put money in, pay money out, and make purchases, having access to that money is fundamental as well.
Which seems easy enough to do, until there is a glitch!
If there is an outage, glitch, or some form of “ghost in the machine”, that denies us or doesn’t allow access to our money, that is a serious breakdown in the fundamentals of banking.
But outside of not being to access our money, do these glitches and outages cause any other disruptions or damage?
Banking Outage Disruptions
It would appear that banking outages and online disruptions, or glitches, seem to be an almost daily, and ongoing occurrence, or should I say/write…ongoing nuisance.
The first and immediate impact of these outages is you cannot access your money. You may be at a cashpoint, or making a purchase and your card is denied, and you cannot take money out or pay for your purchase.
It can be a bit embarrassing as well.
According to the FCA/Financial Conduct Authority, banks have experienced “more than one IT shutdown” every month in 2018. Barclays and Lloyds had 41 and 37 respectively in a nine (9) month period!
That is a lot of outages.
In fact the FCA is now telling banks, they must disclose to customers the number of outages they have experienced.
According to the CMA/Competition and Markets Authority’s Senior Director Adam Lamb, “For the first time, people will now be able to easily compare banks on the quality of the service they provide, and so judge if they’re getting the most for their money or could do better elsewhere.”
“This is one of the many measures – including Open Banking and overdraft text alerts – that we put in place to make banks work harder for their customers and help people shop around to find the best deals for them.”
In addition to not having access to your money, some outages may stop your direct debits and payments being processed out to your creditors, in specific loan payments.
If you look at what makes up your credit score:
* Payment history 35%
* Balances on the accounts 30%
* How long you have had credit 15%
* Types of accounts you have 10%
* New credit and footprints 10%
Missing a payment is the largest factor due to your payment history (35%) and can do the most damage to your credit score.
It is not just the late fees or charges you may incur due to the late or missed payment, but by lowering your credit score you could be denied credit later on. Many types of loans are based on affordability and credit scores, a low credit score could see you rejected for a loan, or charged a higher interest rate.
These banking glitches or outages can do more harm than just frustrate us that we cannot access our money.
It is important that we check our credit reports on a regular basis and if an outage causes a missed payment, we need to discuss this with:
* The bank
* The lender
* And if need be the credit bureaus