Equifax has provided inaccurate credit scores on millions of US consumers seeking loans during a three-week period earlier in 2022. Equifax sent the inaccurate scores on people applying for auto loans, mortgages, and credit cards to banks and nonbank lenders.

As mentioned in Wall Street Journal, the scores were sometimes off by 20 points or more in either direction, enough to alter the interest rates consumers were offered or to result in their applications being rejected altogether. The inaccurate scores were sent from mid-March through early April, beginning to disclose the errors to lenders in May. Wall Street Journal mentions that Equifax has since fixed the error, which the company described as a ‘technology coding issue.

’ The glitch didn’t alter the information in consumers’ credit reports. Equifax maintains credit reports on more than 200 million US consumers and sells them to lenders. The information in these files includes whether consumers are applying for debt, the types of accounts they have, and whether they have a history of paying on time and determines consumers’ credit scores.

Credit scores are among a number of factors lenders consider when making loan decisions. Who was affected by Equifax’s wrong credit scores? The ‘glitch’ affected lenders across multiple consumer loan products, not just mortgages. The percentage of incorrect scores provided to lenders varied.

At one bank, for example, 18% of applicants during the three-week period had incorrect scores, with an average swing of 8 points, as mentioned by Wall Street Journal. Equifax told one large auto lender that about 10% of applicants during the three-week period had inaccurate scores. Of those, several thousand saw a change of 25 points or more on their credit score.

In a small number of cases, applicants went from having no credit score at all to a score in the 700s—or vice versa. The most widely used credit scores range between 300 to 850; the higher the credit score, the more likely an applicant will get approved and at a lower interest rate. Mortgage lenders sought about 2.

5 million credit scores in the period in question. But because they typically view credit scores from Equifax, Experian PLC, and TransUnion as well, the glitch’s effects on mortgages may have been blunted. The Equifax data breach The glitch is another setback for Equifax, which fell victim to a hack in 2017 that exposed the sensitive personal information of nearly 150 million Americans.

It was one of the most analysed, discussed, and large data exposés from 2017, as credit card numbers for over 209,000 consumers and certain dispute documents, which included personal identifying information of approximately 182,000 consumers were accessed. The credit bureau has been facing more than 240 class-action lawsuits from consumers and three top officials had to leave the company, over the way it handled the massive data breach. The company discovered the breach on July 29, 2017.

Equifax said in its statement that it was working with law enforcement agencies and has hired a cyber-security companies to investigate the breach. Equifax’s shares fell nearly 19% in after-market trading as investors reacted to possible consequences of the exposure of sensitive data of nearly half of the US population. Nevertheless, the company said in a statement that the executives were not aware that an intrusion had occurred when they sold their shares.

.