Credit Scores for Millions Were Wrong

Equifax glitch affected reports over 3 weeks, possibly changing interest rates or causing loan rejections
By Bob Cronin,  Newser Staff
Posted Aug 3, 2022 4:36 PM CDT
Equifax Provided Wrong Credit Scores for Millions
Newly installed Equifax CEO Mark Begor poses in 2018 in Atlanta.   (AP Photo/Mike Stewart)

(Newser) – Incorrect credit scores for millions of US consumers seeking loans were sent by Equifax to banks and lenders, in some cases driving up interest rates offered, in others causing applications to be rejected. The inaccurate scores were forwarded over a three-week period from mid-March to early April, the Wall Street Journal reports. Equifax, which blamed a coding error, started telling lenders about the problem in May and issued a statement Tuesday after the Journal's report was published saying few potential borrowers were rejected because of the problem. A trade publication, National Mortgage Professional, first reported the problem in June.

For the company, "the impact is going to be quite small," chief executive Mark Begor told investors at the time, "not something that's meaningful to Equifax." But for about 300,000 consumers applying for auto loans, mortgages and credit cards, the problem changed their credit score by at least 25 points, per CNN. Equifax did not provide numbers, but the housing agency Freddie Mac told clients on June 1 that about 12% of the scores forwarded during the period might have been off. Among the lenders that received the wrong scores were Ally Financial, JPMorgan Chase, and Wells Fargo.

Equifax would not answer CNN about how consumers can find out whether their scores were affected, and if so, what their options are if the error raised the interest rate they're paying or their loan bid was rejected. Company shares fell around 2% Tuesday but they rebounded Wednesday, rising 3.3%. A data breach in 2017 affecting the personal information of almost 150 million consumers cost Equifax $700 million in fines and restitution. (Read more Equifax stories.)

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