Equifax sent incorrect credit scores this spring for millions of customers applying for home and auto loans, the Wall Street Journal reported Tuesday.
As one of the top three credit reporting companies in the United States, Equifax provides financial information and consumer scores that affect whether people are approved for products including mortgages, credit cards and car loans. and what interest rate they pay. Most credit scores range from 300 to 850, with consumers with higher scores getting more favorable terms.
The magazine reported that millions of Americans were affected by the Equifax error, with some scores changing as much as 20 points in either direction, enough to turn some potential borrowers off a loan. According to the paper, a small number of people went from having no credit score to having one 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.
Encoding problem
In a statement on its website, Equifax said it fixed the bug, 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 resolved and that we have been working closely with our customers on the analysis to satisfy better the needs of consumers.” said the company.
Equifax also said the underlying information on the credit report did not change. “[T]there was no change in the vast majority of ratings during the three-week period of the problem,” the company said. “For consumers who experienced a change in ratings, initial analysis indicates that only a small number of “They may have received a different credit decision.”
The news was previously reported National Mortgage Professional, a trade publication, in May. Equifax CEO Mark Begor acknowledged the mistake at a financial conference in June.
“We had a coding issue that was a mistake made by our tech team in one of our legacy apps that caused some scores to come out that had incorrect data. And we fixed that,” he told attendees, according to a transcript of the event.
Begor added that the company was working with affected consumers and noted, “We think the impact will be fairly small, not something significant for Equifax.”
Equifax was previously involved in a 2017 data breach which exposed sensitive information of nearly 150 million Americans and led to the dismissal of the then CEO of the company. Equifax paid $700 million in fines and restitution after the breach.
