Credit Agency Glitch Drops Credit Scores

April 14, 2011 No Comments »
Credit Agency Glitch Drops Credit Scores

A glitch at credit reporting agency Experian put consumers in a panic after their credit scores plummeted temporarily.

Apparently an undisclosed number of users who had subscribed to credit score monitoring services received credit score alerts regarding the drop in early April.

After logging in to their accounts, users discovered they were over their credit limit on their HSBC credit card accounts.

The glitch reportedly dropped the last two digits on credit lines, so a $5,000 credit line was treated as a $50 credit line.

Obviously those with outstanding credit beyond $50 were seen as overextended, which dropped associated credit scores 60 points or more in some cases.

Remember, credit utilization is a huge scoring component for both Fico score and VantageScore, so the impact was palpable.

Enough to push an excellent credit score into the average credit score realm on the credit score scale.

Experian responded to claims, saying an “isolated administrative error in coding” took place on April 1 (no April fool’s joke here folks), but was detected on April 4, and later corrected.

So essentially it was a short-term scare, and shouldn’t have any long-term impact on anyone’s credit scores.

Of course, those who applied for major loans, such as an auto lease or mortgage on the days the error was recorded, may have been impacted with a higher rate or a flat out denial.

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