Equifax issued bad credit scores for millions of consumers

Latest / August 3, 2022 / Admin / 0

In some cases, the errors were large enough — the differential was at least 25 points for about 300,000 consumers — that some potential borrowers were wrongly denied credit, the company said in a statement.

Shares (EFX) fell about 2% Tuesday on the report and was down nearly 5% and shortly after opening Wednesday.

The issue arose due to a “coding issue” during a change to one of Equifax’s servers, according to the company, which said the issue “was in place over a period of a few weeks.” . [and] resulted in a potential miscalculation” of credit scores.

Although Equifax did not specify dates or numbers, a June 1 alert from real estate agency Freddie Mac to its clients said that Equifax had told the agency that about 12% of all ratings credit reports published from March 17 to April 6 may have been incorrect.

Equifax wrote that “there was no change in the vast majority of scores” and that “credit reports were unaffected.” But the company declined to comment to CNN Business on how people can tell if they were among those whose credit scores were incorrectly reported — and what recourse they might have if they received loans at a higher rate. high or if they turned down a loan outright because of the snafu.

Equifax released its statement later Tuesday, hours after The Wall Street Journal published a report on the errors. Trade publication National Mortgage Professional reported in May that Equifax was warning lenders about the possibility of incorrect scores, and the company issued a statement to the magazine at the time acknowledging the technological error.

Tuesday’s disclosure of the scoring errors comes just after Equifax said its board voted to give CEO Mark Begor a $25 million retention bonus.

Last Friday’s regulatory filing announcing the bonus said the board believes Boger is “uniquely qualified to continue to lead the company through the final stages of our $1.5 billion technology transformation.”

Equifax tracks the credit histories of millions of borrowers — almost all Americans — and sells that information to banks and other lenders. As one of only three major credit reporting companies, Equifax plays an outsized role in the credit scoring industry: its information helps lenders fix borrowers’ interests or turn down borrowers looking for mortgages. , car loans or credit cards.

This is not the first data problem for Equifax. In 2017, the company disclosed that nearly 150 million people’s personal information had been compromised. The company eventually reached an agreement to pay state and federal regulators up to $700 million to settle investigations related to the incident, the largest settlement ever paid for a data breach.

Company, Equifax issued bad credit scores for millions of consumers - CNN