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 US., Equifax
provides financial information and scores for consumers, affecting
whether people are approved for products including 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.
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
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.