Equifax has confirmed that it sent lenders the wrong credit scores for millions of consumers who applied for credit cards, mortgages or auto loans during a three-week period in March and April 2022.

In a statement on its website, Equifax estimated that “less than 300,000 consumers experienced a score shift of 25 points or more,” which could be enough to cause a bank or non-bank lender to charge a higher interest rate, reject a loan application, or deny a credit card.

The errors were huge in some cases, involving several hundred-point decreases or increases. Some people went from a good score in the 700s to no credit score at all, or vice versa, according to Equifax.

Equifax has not notified any individual consumers who may have been affected, so it is unclear how many people were actually harmed.

It is also unclear what will happen for people who were affected. For example, someone with extremely bad credit might currently be approved for a big home loan based on an inaccurately high score.

On the flip side, someone with good credit might currently be paying a higher interest rate on their auto loan due to an inaccurately low score.

Equifax has not provided a list of lenders, but the mortgage institutions Fannie Mae and Freddie Mac have sent out warnings. The list includes lenders big and small, including banks and non-bank lenders such as JPMorgan Chase, Wells Fargo, Ally Financial Inc., and more.

This is not the first big scandal to rock Equifax. In September 2017, Equifax reported that hackers had stolen private data for 147 million Americans, including Social Security numbers, driver’s license numbers, and addresses. Equifax failed to take basic steps to protect consumer data, according to the FTC, as part of a $574 million settlement in 2019.

Source: Equifax Sent Lenders Inaccurate Credit Scores on Millions of Consumers

Posted by Daily Hornet

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