Equifax issued wrong credit scores for “millions” of customers, report says

Equifax this spring sent out incorrect credit scores for millions of customers applying for home and auto loans, the Wall Street Journal reported on Tuesday.

As one of three major credit-reporting companies in the U,S., Equifax provides financial information and scores for consumers, affecting whether people are approved for products incuding mortgages, credit cards and car loans, and what interest rate they pay. Most credit ratings range from 300 to 850, with higher-scoring consumers getting more favorable terms.

The Journal reported that millions of Americans were affected by Equifax’s error, with some scores changing by as much as 20 points in either direction — enough for some prospective borrowers to be rejected for a loan. According to the paper, a small number of people went from having no credit score to having a score in the 700s, or vice-versa. The incorrect scores were sent to Ally Financial, JPMorgan Change and Wells Fargo, among other lenders, the Journal reported, citing unnamed sources.

Coding problem

In a statement on its website, Equifax said it fixed the error, which it referred to as a “coding issue.”

“We know that businesses and consumers depend on our data and Equifax takes this technology coding issue very seriously. We can confirm that the issue has been fixed and that we’ve been working closely with our customers on analysis to best meet the needs of consumers,” the company said.

Equifax also said that underlying credit report information did not change. “[T]here was no shift in the vast majority of scores during the three-week timeframe of the issue,” the company said. “For those consumers that did experience a score shift, initial analysis indicates that only a small number of them may have received a different credit decision.”

The news was previously reported by National Mortgage Professional, a trade publication, in May. Equifax CEO Mark Begor acknowledged the error at a financial conference in June.

“We had a coding issue that was a mistake made by our technology team in one of our legacy applications that resulted in some scores going out that had incorrect data in it. And we fixed the issue,” he told attendees, according to a transcript of the event.

Begor added that the company was working with affected consumers, noting, “We think the impact is going to be quite small, not something that’s meaningful to Equifax.”

Equifax was previously implicated in a 2017 data breach that exposed sensitive information of nearly 150 million Americans and resulted in the ouster of the company’s then-CEO. Equifax paid $700 million in fines and restitution after the breach.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button