HSBC Credit Limits Temporarily Misreported by Experian

“On April 1, 2011, Experian loaded data from a single data furnisher and made an isolated administrative error in coding this data. This error was detected on Monday, April 4, which Experian quickly corrected and the data was immediately suppressed. Since that point, the information has now been reloaded accurately and the file reflects the most updated information provided by the lender.” That statement came directly from Experian who, in all fairness, has been very open and forthcoming regarding their mistake.
What that means in English is this…

HSBC, who is a large global bank, sent Experian “updates” to their credit card holder accounts, which most credit card issuers do once a month. Experian, like the other two credit bureaus, will take the tape or electronic media and begin to load the information onto their databases. That process would update/overlay whatever was on your credit report from HSBC Credit Card Services from the prior month’s update.

The problem is that Experian only reported the first two digits of the card holder’s actual credit limit.  So, for example, if you have a $20,000 credit limit on your HSBC Credit Card then it was showing up as $20. That’s bad news for your credit scores because one of the key components in your scores is the proportion of balances to limits on revolving credit cards.

This error caused some consumer’s scores to go down. We don’t know how many scores were damaged because neither Experian nor HSBC, who really did nothing wrong here, has disclosed it. This is what we know for certain…the change was either neutral or more likely negative to your score because if you had any sort of balance on the HSBC card then your “utilization percentage” on that card skyrocketed to well over 100%.

Apparently some HSBC cardholders received the above alert from their credit monitoring service notifying them that their HSBC balance was over the credit limit. This caused calls to HSBC, which lead to calls to Experian who then suppressed the incorrect credit reporting and subsequently corrected it. The window of exposure seems to have been somewhere between 12 hours and a little over 3 days.

John Ulzheimer is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry.  Follow him on Twitter here.

Categorised in: Credit Cards, Credit Monitoring, Credit Report, Credit Score

This post was written by John Ulzheimer