December 7, 2023

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

As one of the big three credit reporting companies in the US, Equifax provides financial information and scores to consumers, influencing whether people are approved for products including mortgages, credit cards and car loans, as well as the interest rate that they pay. Most credit ratings range from 300 to 850, with consumers with higher scores receiving more favorable terms.

The Newspaper reported that millions of Americans were affected by the Equifax error, with some scores shifting as much as 20 points in either direction — enough to get some prospective borrowers turned down for a loan. According to the paper, a small number of people went from a zero credit score to a score in the 700s, or vice versa. The false ratings were sent to Ally Financial, JPMorgan Change and Wells Fargo, among other lenders, the newspaper said, citing unnamed sources.

Encoding problem

In a statement on its website, Equifax said it had fixed the error, which it described as a “coding problem.”

“We know that businesses and consumers depend on our data, and Equifax is taking this technology coding issue very seriously. We can confirm that the issue has been resolved and that we are working closely with our customers on analytics to better meet the needs of of consumers,” the company said.

Equifax also said the underlying credit report information did not change. “[T]here was no shift in the vast majority of ratings during the three-week time frame of the release,” the company said. different credit decision”.

The news was previously reported by National Mortgage Professional, 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 our technology team made in one of our legacy apps that resulted in some scores coming out that had incorrect data. And we fixed that,” he told attendees, according to a transcript of event.

Begor added that the company is working with affected customers, noting, “We think the impact will be very small, not something that makes sense for Equifax.”

Equifax was previously involved in a Data breach 2017 which exposed sensitive information of nearly 150 million Americans and resulted in the expulsion of the then managing director of the company. Equifax paid $700 million in fines and restitution after the breach.

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