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Posted On August 5, 2022 Product Liability and Class Action News

Equifax Misreports Credit Ratings of as Many as 300k People to Lenders

August 5, 2022 – When you apply for a home mortgage, car loan, or any other loan product, you know that the lender will pull your credit. And, if you are like most people, you do everything possible to maintain a credit score as high as possible. However, according to a recent report, one of the three major credit reporting agencies in the United States, Equifax, misreported the credit scores of as many as 300,000 consumers to all types of lenders. This resulted in many credit-worthy individuals being denied loans. However, it also means that many consumers accepted loans based on inaccurate credit scores—meaning they are paying more in interest every month than they should be.

If you applied for or took out a loan between March 6, 2022 and April 6, 2022, it is possible that you were among the group of people who were impacted by the Equifax credit reporting error. If so, you may have either been denied a loan based on incorrect information or accepted terms that were less favorable than they should have been had Equifax provided the lender with your correct credit score. This could mean that you will end up paying hundreds—or more likely thousands—of dollars more in interest throughout the term of the loan.

The lawyers at Console & Associates, P.C. are actively investigating consumer claims that Equifax misrepresented their credit score to lenders. We are also interviewing and offering free consultations to anyone who believes that they may have been denied a loan or took out a loan under unfavorable conditions due to a misreported credit score. We are immediately available to discuss your situation, provide an overview of your rights, and help you pursue appropriate legal action against Equifax.

What Is a Credit Reporting Agency?

Credit reporting agencies, also called credit bureaus, gather information from creditors and pass that information on to lenders who pay for access to this information. Credit reporting agencies are for-profit companies that are not affiliated with any government entity. There are three main credit bureaus in the United States: Equifax, Experian and Transunion.

Did Equifax Miscalculate Credit Scores?

“A 25-point shift in someone’s credit score is enough to shift their overall credit rating from “good” to “fair” or from “fair” to “poor” …”
Yes, in a statement on the Equifax website, the company admits that it miscalculated the credit scores of hundreds of thousands of people. For many of these affected individuals, the error was minor. However, according to Equifax, the available “data shows that less than 300,000 consumers experienced a score shift of 25 points or more.” A 25-point shift in someone’s credit score is enough to shift their overall credit rating from “good” to “fair” or from “fair” to “poor”—a significant difference for those looking to take out a loan.

Why Did Equifax Provide the Wrong Credit Score to Lenders?

Evidently, the Equifax credit reporting mishap resulted from a “coding issue within a legacy, on-premise server environment in the U.S. slated to be migrated to the new Equifax Cloud infrastructure.” More simply put, the error occurred when Equifax transitioned to a new server.

During What Time Was Equifax Misreporting Credit Scores?

Based on the results of an Equifax investigation, the period of time that the credit reporting error existed was between March 6, 2022 to April 6, 2022. However, while Equifax has definitively stated that April 6 marked the resolution of the error, the company’s language was less assuring regarding the date the error first started affecting consumers’ credit scores.

What Could a Misreported Credit Score Mean to Consumers?

If Equifax misreported your credit score, you could have suffered one of two different harms. First, if you applied for a loan when the error was in effect, it could have resulted in a lender rejecting your loan application. This may not be a major issue for those who found other loans through similar lenders. However, many who were denied credit may have also found it extremely difficult to find another lender willing to make the loan.

The more complex scenario relates to those who accepted a loan after Equifax provided the lender with an inaccurate credit score. In this situation, the terms of the loan the consumer took out—most notably the interest rate—is very likely to be much less favorable than it would otherwise be. Adding to the complexity of this situation is that interest rates have increased significantly since the Equifax credit reporting error was discovered. Thus, lenders have reached out to Equifax for more information and are struggling to find a solution. Some lenders may be willing to reprice a loan based on the Equifax credit reporting error or accept a new application from those consumers who were denied credit. However, there is no protocol guiding lenders in how to deal with this situation.

Was Your Credit Score Misreported to a Lender?

If you took out a loan or applied for a loan and were denied credit between March 6, 2022 and April 6, 2022, the lawyers at Console & Associates, P.C. want to help. At Console & Associates, P.C., we have a decades-long history of standing up for the rights of those who have otherwise been overlooked by the system. We understand the frustration you are experiencing and want to assist in any way we can. To learn more about the Equifax credit reporting error, reach out to an experienced attorney at Console & Associates, P.C. at 866-778-5500. We can help you understand your rights, answer your questions, and offer you guidance about how you may be able to pursue a claim against Equifax to rectify the financial harm you suffered.