Equifax sent lenders the wrong credit scores for millions of people who applied for mortgages, auto loans and credit cards in March and April 2022, resulting in higher payments and rejected loans.
What You Can Do & How We Can Help
The Schmidt Firm, PLLC is currently accepting Equifax induced injury cases in all 50 states. If you or somebody you know was negatively impacted by Equifax sending the wrong credit score when you applied for a mortgage, auto loan, or credit card, you should contact our lawyers immediately for a free case consultation. Please use the form below to contact our Class Action Litigation Group or call toll free 24 hours a day at (866) 920-0753.
UPDATE: Equifax Class Action Filed for 130-Point Credit Score Error
In August 2022, a woman who had to pay more money on her auto loan due to Equifax’s credit score errors filed a class action lawsuit against the company in federal court.
The lawsuit was filed by Nydia J., a woman from Florida who was pre-approved for an auto loan in April 2022, where she was expecting to pay $350 a month. Instead, the loan was rejected after Equifax sent her lender a credit score that was 130 points lower than it should have been. She was forced to get another loan at $504 a month.
The lawsuit accuses Equifax of violating the Fair Credit Reporting Act (FCRA), a federal law that requires credit bureaus to provide accurate financial information – or face financial penalties ranging from $100 to $1,000 per violation, plus other damages, attorney’s fees, court costs, and punitive damages.
Equifax Error on Credit Scores Causes Financial Chaos
During a three-week period in March and April 2022, Equifax sent out the wrong credit scores to lenders big and small, resulting in higher interest rates and denied applications for thousands of Americans.
The glitch affected millions of consumers, but around 300,000 consumers had changes of 25 points or more in either direction. The inaccurate credit scores were sent out when people applied for auto loans, mortgages, or credit cards from banks and non-bank lenders, including JPMorgan Chase, Wells Fargo, Ally Financial Inc., and many more.
How Will I Know If I Was Impacted?
Anyone who applied for a mortgage, auto loan or credit card in March and early April could be affected. Equifax sent out the wrong scores between March 17 and April 6, 2022, but Equifax has NOT notified individual people who may have been harmed. Furthermore, Equifax has not named the specific lenders who were sent the incorrect scores.
What is the Problem?
An inaccurate credit score could hurt you in many cases. Here are a few examples:
- Denied credit card application
- Loan application rejected (auto lenders, mortgage lenders, etc.)
- Home buyers cancel contracts due to unexpectedly high interest rates
- Higher monthly payments on credit cards, car or mortgage
- Private student loans are more expensive
- Insurance companies charge higher premiums (credit-based insurance scores)
- Landlords deciding not to rent a property to you
- And more
What is Equifax?
Equifax is one of the “Big Three” consumer credit reporting agencies in the U.S., along with Experian and TransUnion. These companies provide banks with consumer credit scores ranging from 300 to 850.
What is a Credit Score?
When Americans apply for loans like mortgages, auto loans or opening a new credit card, Equifax provides banks and non-bank lenders with their financial history — including a credit score.
The lender then uses the credit score and other information to decide whether the applicant will be approved for the loan or credit card, and other terms of the agreement (such as how high the interest rate is).
Why Are High Credit Scores Good?
High-scoring consumers get lower interest rates and better terms on their loans. Low-scoring consumers may not get approved at all, or they may have higher payments on their house, car, and credit card.
Equifax Says 300,000 People Had Big Errors
Equifax sent out the wrong credit scores for millions of people. On its website, Equifax estimated “less than 300,000 consumers experienced a score shift of 25 points or more.” A loss of 25 points on your credit score could be enough to increase the interest rate, or result in the loan being rejected altogether.
Some Errors Were Huge!
In some cases, the score went down hundreds of points — from a good credit score in the 700s to no score at all, Equifax said, or vice versa.
Was Your Credit Score Wrong?
When agencies send out an incorrect credit score, it can cause financial chaos for consumers:
- Too Low: If Equifax sends out a credit score that is too low for someone with good credit, the result is higher interest rates, bigger monthly payments, denied loan applications. A person might be unable to get a line of credit in an emergency, or buy a car to get to work, or a home-buyer’s contract falls through.
- Too High: If the incorrect credit score is too high, a consumer with extremely bad credit could be approved for a big loan to buy an expensive house or a luxury car. It is still unclear what lenders will do when the mistakes are discovered, but they might try to take back the loan, or charge a higher interest rate.
Fannie Mae & Freddie Mac Send Out Warning
Equifax started to publicly disclose the “coding errors” in May to an industry publication called National Mortgage Professional. Since then, huge mortgage institutions such as Fannie Mae and Freddie Mac have sent out warnings to lenders:
“Any lender that received credit report data directly from Equifax online or via a third-party consumer reporting agency/reseller over this period may be affected by this incident.”
How Did This Happen?
Equifax blamed a “coding issue introduced during a technology change” on miscalculated credit scores. This may have caused Equifax to send out the wrong credit score for 12% of customers from March 16 to April 6, 2022.
Equifax Claims They Fixed Credit Score Errors
Equifax said they fixed the issue on April 8, but did not notify any individual consumers who were affected. The scandal did not receive widespread attention until Equifax publicly confirmed the errors in an article published on August 2 in The Wall Street Journal, five months after the errors occurred.
Equifax Pays Huge Class Action Settlement After Data Breach
The last big Equifax scandal was in September 2017, when Equifax reported that hackers had accessed private data for 147 million Americans, including Social Security numbers, driver’s license numbers and addresses, making it one of the biggest identity-theft operations in history. In 2019, Equifax agreed to pay $574 million as part of a settlement.
Can I Join a Class Action?
The Schmidt Firm, PLLC is nationally recognized as a class action law firm. We are filing individual lawsuits for people who had a loan rejected, denied a credit card, or paid higher interest rates when Equifax sent out the wrong credit score in March and April 2022.
About Class Actions
Class actions are a useful way for people to join together and seek compensation. In most class actions, one person (called the “class representative”) files a lawsuit on behalf of a much larger group of people with the same legal claim. If compensation is awarded through a settlement or jury verdict, everyone in the class action benefits.
Do I have an Equifax Lawsuit?
The Schmidt Firm, PLLC is currently accepting Equifax induced injury cases in all 50 states. If you or somebody you know was negatively impacted by Equifax sending the wrong credit score when you applied for a mortgage, auto loan, or credit card, you should contact our lawyers immediately for a free case consultation. Please use the form below to contact our Class Action Litigation Group or call toll free 24 hours a day at (866) 920-0753.
Attention Lawyers: We consider a referral from another law firm to be one of the greatest compliments. If your firm is interested in referring us a case or for us to send you a list of previous award judgments and/or average referral fees, please visit the Lawyer Referral section of our website.
The Schmidt Firm, PLLC has been recognized as one of the nation’s leading plaintiffs' law firms and handles cases in all 50 states. We are very proud of our legal achievements, but equally self-respecting of our firm's reputation for providing personal attention to each and every client we represent.
