Not upheld: misreporting on credit file complaint against Bank of Scotland plc

Decision detail

Summary

Mr S complained that Bank of Scotland misreported a reduced payment arrangement on his credit file, claiming it showed missed payments and damaged his ability to obtain credit. BOS had set up reduced payment arrangements with Mr S in December 2024 and March 2025 due to his inability to pay the full monthly amount. The ombudsman found that BOS's reporting was factually accurate except for one error in March 2025 which was immediately corrected when Mr S complained. Mr S had been informed in advance that the reduced payment arrangement would adversely impact his credit rating. The complaint was not upheld.

The Ombudsman's reasoning

Lenders are permitted and required to report factually accurate payment behaviour to credit reference agencies. When a borrower enters into a reduced payment arrangement, the lender must report the under-payment, which inevitably damages the credit rating. The ombudsman could only order correction if the reporting was factually incorrect or resulted from BOS's error. Apart from the March 2025 error (already corrected), the reporting was accurate and Mr S had been warned in advance of the impact. The ombudsman noted that potential creditors consider the entire financial position, not just mortgage payment records.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website