Equifax, one of the largest credit reporting agencies, sent lenders inaccuratelyfor millions of US consumers between mid-March and early April. The agency incorrectly increased or decreased some scores by more than 20 points. This concerned Lenders offered, and in some cases caused, denial of loan applications altogether.
The error was due to a coding issue, Equifax said in an Aug. 2 statement, and the results have since been readjusted.
“Our data shows that fewer than 300,000 consumers experienced a score shift of 25 points or more,” Equifax said. “While the score may have shifted, a score shift does not necessarily mean that a consumer’s credit decision has been negatively impacted.”
The company added that it is working with the financial institutions that use it “to determine actual consumer impact.”
The Consumer Data Industry Association — which represents credit bureaus like Equifax, Experian, and TransUnion — told the Washington Post that getting the right credit reports is “of the utmost importance.”
But in a January report, the Consumer Financial Protection Bureau, a state watchdog, said that “America’s credit oligopoly” has shown a pattern of underreaction when consumers complain about failures. The CFPB warned of “serious harm resulting from its flawed financial oversight business model.”
How can you find out if you’ve declined a loan or received a higher interest rate because of Equifax’s error? We’ll explain it below – and tell you what steps to take if it were you.
Who Was Affected by the Equifax Credit Report Error?
If you were denied a line of credit between March 17 and April 6, 2022 — on a credit card, auto loan, mortgage, or other line of credit — it may be due to an error by Equifax.
Around 2.5 million credit scores were requested from mortgage lenders during that three-week window, according to The Wall Street Journal, but since they typically request reports from all three credit agencies, it’s hard to say how badly the bug affected it.
Equifax has fewer than 300,000 accounts that are offset by 25 or more points either way, enough to sway a lender’s decision.
What can you do if you think you were denied credit because of Equifax’s error?
Thomas Nitzsche, senior director of media and brand at Money Management International, a nonprofit credit advisory agency, said people who believe they have been improperly denied credit should contact the lender to find out if they have used Equifax, to make a credit decision.
In an emailed statement to CNET, Equifax also encouraged borrowers who think they may be affected to “contact their lender for more information.”
If your score turns out to be incorrect because of the coding issue, you can file a complaint with the lender and the CFPB, Nitzsche said, as well as your state’s attorney general’s office.
If you are still looking for a loan, you can also get the decision of another Schufa.
“You should also document the incident as I assume a class action lawsuit could be forthcoming,” Nitzsche said.
Financial institutions are also seeking more information from Equifax, the Journal reported, and are considering solutions for loan seekers who have been assigned artificially inflated interest rates or who have had the loans outright rejected.
You may get a lower interest rate
Individuals affected by Equifax’s error may not have been declined for a line of credit, but their interest rate may have been tabulated incorrectly.
If you were approved for a line of credit between March 17 and April 6 — “maybe a little earlier to account for the underwriting delay,” Nitzsche said — you could be eligible for an interest rate adjustment.
Contact your lender and see how they determined your interest rate. If an incorrect Equifax score was used, ask if you can retroactively credit the interest already paid based on your current interest rate.
“This applies in particular to consumers who are made aware that they are affected,” said Nitzsche.
Check your credit score
Even if you didn’t apply for a credit line this spring, you should regularly check your credit report and credit score for any abnormalities.
You can check your credit through companies likeor often via your bank or credit card.
Americans are toofrom TransUnion, Equifax and Experian. Credit reports contain information about your current credit situation, such as B. the status of your accounts, any collection items or judgments and your loan repayment history.
Equifax credit reports can also be ordered by registering for a free myEquifax account.