Bank errors could hurt your credit score – here’s how to check

Too many ‘hard searches’ by your bank could damage your credit score (Picture: Getty Images/iStockphoto)

One of my Instagram followers contacted me recently to share an issue he’d had following an application for a new current account with Lloyds.

Anthony regularly checks his credit reports, and expected to see a single ‘hard search’ appear on his file as a result of the new account.

What he didn’t expect was that Lloyds had actually made four separate full credit checks.

You might not think this is an issue, but each of these hard searches can knock your credit score, particularly four in quick succession.

It’s not always clear to future lenders why a search took place, so it might look like he’d been rejected a number of times or that he’s desperate to borrow cash.

If Anthony was to then apply for something else that required a credit check — such as a credit card, mortgage or even a new mobile phone contract — these extra searches could mean he’s rejected.

I contacted Lloyds on Anthony’s behalf and the bank told me it was ‘a temporary issue… [and] we took action to remove the hard searches incorrectly applied to his account’.

I asked Lloyds if the same could have happened to other customers. Their spokesperson said the issue ‘impacted a small number of customers… in mid-September. This has been fixed and we are proactively changing impacted credit reports’.

It’s good news the error will be fixed, but there’s a strong chance it only came to light because Anthony checked his report and knew what to look for.

Though this is probably an isolated incident, other mistakes can crop up on credit reports, such as old (or incorrect) addresses or accounts you thought you’d closed but are still open, and may still be taking direct debit payments.

There could be debts you’re unaware of, or even signs of fraud where people have used your identity to open up phone deals or take out credit.

It shows the importance of checking your credit report with all three credit reference agencies. There’s no need to do this every month, but it’s worth looking after, and before any applications, to check all is as you’d expect.

Fortunately, there are websites that’ll allow you to see your full report and track your score for free.

Sign up and you’ll also get notified of any changes, but watch out for extra emails from these companies trying to entice you into opening a new credit card or loan.

Time to support local shops

One of my favourite special offers returned last Saturday for those with an American Express credit card.

The Shop Small promotion gives you £5 back when you spend £15 or more at participating shops, restaurants, pubs and other businesses.

This can be a win-win. You visit a local independent you might not have been to before and splash the cash with them, and then Amex will credit £5 back to you.

Those with an American Express credit card can use the Shop Small promotion (Picture: Getty Images)

There are a few restrictions, such as you can only get the money back once per retailer and you’re capped at £25 back. But this is per card, so if you have supplementary cards in your own name you can increase what you get back.

Obviously, only spend what you can afford on things you need to buy. The offer still has over a week to run and ends on December 15.

Andy’s who to follow: Lesley Negus

If you’re particularly feeling the pinch of high inflation in the supermarket, then Lesley Negus’s blog should be at the top of your reading list.

It is full of hundreds of recipes that use cheap ingredients and stretch leftovers, so you’ll be able to feed yourself and your family for less without sacrificing taste.

Lesley’s top thrifty food tip:

‘The average household wastes a rather shocking third of the groceries they buy. Avoiding this and using up every scrap equals a whole week and a half’s groceries for free, every month. Meal planning is the way to go!’

Andy Webb is an award-winning blogger and podcaster from Be Clever With Your Cash. Follow Andy on Twitter and Instagram via @andyclevercash

If you want more tips and tricks on saving money, as well as chat about cash and alerts on deals and discounts, join our Facebook Group, Money Pot.

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