Possible Effects of Bank IT Failures on Credit Score
Have you ever wondered the effects that bank IT failures can have on your credit score? I believe you must have, in one time or the other, experienced IT failure of the bank you are using. Unfortunately, it is not every time there is malfunctioning of their IT system that you are aware of. So, if you are not aware, how can you even imagine whether a breakdown of the IT of your bank may impact your credit score in any way?
Without bothering you with much word, let me briefly explain how you can be a victim of bank IT breakdown. You must have been told that if you don’t want to miss payment, that it is better to automate your payment. This means that your credit card provider automatically charge your credit card balance against your bank account at the end of each month. This is actually good as you won’t need to remember your payment date. The only thing is that you need to always have enough fund in your account. The amount should be able to conveniently pay your card balance. This will ensure that you don’t miss your payments.
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But there is a bad news concerning the automation of the payment of your card balance. You can miss your payment without any fault of yours. Bank IT failure can make your payment not to go through. And you know what this means to your credit score. If you miss your payment for period of thirty days, your credit card provider will report this to the credit bureaus. It is not just going to be a negative report on your credit which is capable of tarnishing your credit, it will lower your credit score. If your credit score is very good and you have not missed payment in the past, this missed payment on your report can chop off up to 100 points from your credit score. This can make it difficult for you to get credit or loans at good rates in the future. Besides, your card provider will slam you late penalty fee. Because of this type of error, it is important that you check your credit report frequently throughout the year to ensure that it does not have any errors that may affect your credit score. A credit report may contain errors such as missed payment or default on your payments that you are not even aware of. If you can’t check your credit once in every month, you should be able to check it once a quarter. This will ensure that you stay updated on the happenings relating to your score. If there’s an error, you can correct it online by logging in to the credit bureau’s website. Alternatively, you can fill dispute resolution form and send it to the bureau. If you are able to show that it was an error, your credit card provider can reverse the late penalty fee. Also, the late payment will be removed from your credit report.
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In conclusion, it doesn’t matter if missed payment is caused by factors outside your control such as bank IT failures, it can still hurt your credit. But such errors can be detected and corrected if you check your credit on a regular basis and then take necessary steps.