Partially upheld: credit file reporting error and delayed removal of default complaint against Nationwide Building Society

Decision detail

Summary

Mr H complained that Nationwide Building Society failed to remove a default from his credit file when promised in June 2024, only removing it in July 2025. Mr H claimed this caused him to accept unfavourable mortgage terms, estimating losses of around £11,300. The ombudsman found that while the delay caused significant distress during an already stressful house purchase, there was insufficient evidence that Mr H would have obtained a high-street mortgage or at what rate had the default been removed earlier, as a Decision in Principle does not guarantee full application approval. The complaint was partially upheld with compensation of £500 for distress and inconvenience, but the claim for financial loss was rejected.

The Ombudsman's reasoning

While the ombudsman acknowledged that removing a default would generally improve mortgage prospects, there was insufficient evidence to conclude that Mr H would probably have been approved for a high-street mortgage if the default had been removed earlier. A Decision in Principle is only an initial indication and does not involve full lending assessment. The ombudsman could not reliably assess either the likelihood or value of the claimed loss of opportunity. However, the ombudsman found Mr H experienced significant distress from discovering the default had not been removed when promised, particularly during the stressful process of buying a home in a chain.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website