Equifax issued incorrect credit scores for millions of consumers

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

share (effects) It fell about 2% on Tuesday in the report and was down almost 5% and shortly after Wednesday’s open.

The issue occurred due to a “coding issue” while making a change to one of Equifax’s servers, according to the company, which said the issue “was present for a period of a few weeks.” [and] resulted in the possible miscalculation” of the credit scores.

While Equifax did not specify dates or figures, a June 1 alert from housing agency Freddie Mac to its clients said Equifax told the agency that about 12% of all credit scores released between March 17 and 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 with CNN Business on how people can tell if they were among those whose credit scores were reported incorrectly, and what recourse they may have if they’re given loans at a higher rate or denied a loan outright. due to the gaffe. .

Equifax issued 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 technology-based 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 package.

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

Equifax tracks the credit history of millions of borrowers, almost all of them Americans, and sells that information to banks and other lenders. As one of the top three credit reporting companies, Equifax plays an important role in the credit scoring business: its information helps lenders set rates for borrowers or deny borrowers looking for mortgages, auto loans or credit cards. of credit.

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

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