Fine print, Living with credit, Protecting yourself

April Fool’s Day blunder temporarily damages borrowers’ credit

Jeremy Simon

An undisclosed number of HSBC bank customers apparently saw their credit scores briefly tumble because of a credit reporting error that occurred April 1.

This was no April Fool’s Day prank: Credit bureau Experian says an “isolated administrative error” altered the information on some HSBC customers’ credit reports. According to an MSNBC report, that “glitch” in Experian’s credit reporting “temporarily torpedoed an undisclosed number of consumers’ credit scores.” MSNBC added that HSBC customers who pay for credit monitoring services became aware of the error after they received alerts about a sudden fall in their credit scores.

Borrowers weren’t laughing. “Several consumers claim the glitch dropped the last two digits of the HSBC cardholders’ credit limits. For example, a consumer with a $1,500 credit limit suddenly was reported as having a $15 limit — which in turn caused the consumer to have a balance far larger than the limit,” MSNBC reported. “That in turn spiked the consumer’s so-called credit utilization, which has a big impact on scores.” (FICO, creator of the leading U.S. credit score, says a misreported credit limit that indicates a credit card holder has a maxed-out account could cause a FICO score to drop by 30 to 45 points.)

I contacted Experian about the snafu and a spokeswoman told me the company noticed the problem a few days later and took action. “This error was detected on Monday, April 4, which Experian quickly corrected and the data was immediately suppressed,” the bureau said, echoing the comments it made to MSNBC.

Despite online comments from consumers to the contrary, Experian told me it was not aware of any borrowers who were harmed by the temporary change. As for HSBC, the bank declined to say exactly how many of its customers were hurt by the glitch, although a company spokesman acknowledged via email that “some — not all — accounts were impacted.”

HSBC did share some tips for bank customers who may have been affected by the error:

  • The bank urged customers with questions about an Experian credit report to call the bureau using the number listed on the Experian credit report, or 877-481-6826. HSBC added that information is also available at Experian’s website.
  • The bank said customers with questions about a specific HSBC account should call the number listed on the back of their HSBC credit cards.

The credit reporting and scoring industry appears to be downplaying the incident. FICO says that such credit reporting errors tend to have a limited impact. “As soon as a misreported credit limit has been corrected by the credit bureau, all subsequent FICO scores for that person will reflect the corrected number,” a FICO spokeswoman says.

“The FICO scoring model is designed to use a variety of data from each person’s credit report. If an error is present in one part of the credit report, the remaining data usually will produce a reliable FICO score,” she adds. “In our experience, credit reports continue to be one of the most reliable and accurate information sources available for predictive scoring.”

HSBC customers: Were you among those affected by the error? Did your credit score drop? Share your experiences in the comments section below.

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  • FL Experian Blunder

    On 4/1 my Credit Score was 615
    On 4/5 my score was 605
    on 4/9 ~8pm it was 505
    on 4/9 ~10pm it was 550
    The only change in the credit file was one inquiry for an automobile refinance through a Fed Credit Union which resulted in a savings of 1400 savings and a 80 per month payment savings.

  • Jacqueline

    My account was hit with this april fools day blunder but I check my accounts on a daily basis didnt notice this until april 4th and I made a call to hsbc and experian and by april 5th my account was back on track with no hit to my credit score! I havent noticed any drop in my score at all at this point. I was on top of this like white on rice. I have worked way too hard for my 700+ credit score!

  • Chester

    I had a bank pull my credit for a mortgage on Mon the 4th. My experian score did not reflect the HSBC account at all which made my score drop enough to not get the loan I was applying for. The bank and CBc innovus that pulled the credit were no help what so ever They were not even aware that HSBC had puled all of their accounts from experian on Monday. Until the consumer has the right to Sue the reporting companies credit reports will continue to be a nightmare for most people

  • rodney

    mine was hit hard to it dropped 67 points in 3 days

  • Tonya

    My account was hit with this error and my score dropped by 27 points. I called HSBC regarding the problems and they said they were working on the problem and wouldn’t give me a date for the correction to be made. It’s been more than two weeks and Experian is still reporting the lowered score.

  • Thanks for all the comments.
    To anyone who saw their credit score fall, can you contact me to discuss your story?