Equifax Sent Wrong Credit Scores To Millions Of Consumers

(RTTNews) - Credit giant Equifax (EFX) sent many lenders incorrect credit scores for millions of consumers this spring, in what is being termed as a technology snag with major real-world impact.

The company said that in certain cases, the errors were very high as the differential was at least 25 points for around 300,000 consumers and as a result some would-be borrowers may have been wrongfully denied credit.

The problem occurred because of a "coding issue" when making a change to one of Equifax's servers, said the company, adding that the issue "was in place over a period of a few weeks and resulted in the potential miscalculation" of 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 percent of all credit scores released from March 17 to April 6 may be have been incorrect.

Equifax wrote that "there was no shift in the vast majority of scores" and that "credit reports were not affected." However, the company declined to comment on how people can learn whether their credit scores were incorrectly reported and what recourse they may have if they were issued loans at a higher rate or denied a loan outright because of the snag.

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

Tuesday's disclosure about the score 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 is of the opinion that Boger is "uniquely qualified to continue to lead the Company during the final stages of our $1.5 billion technology transformation."

Equifax tracks the credit history 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 important role in the credit-score business as its information helps lenders set interests for borrowers or deny borrowers seeking mortgages, car loans or credit cards.