Thousands of people may have had loans rejected or currently be paying higher interest rates because Equifax sent out the wrong credit scores to lenders in March and April 2022.
Need a Texas Equifax Credit Score Lawyer? Collen A. Clark is a true advocate for his clients and is passionate about helping Texans that have been injured or wronged. If you or a loved one was harmed when Equifax sent out the wrong credit score to your lender, you should contact our lawyers immediately. You may be entitled to compensation by filing a lawsuit.
UPDATE: Equifax Class Action Lawsuit for Credit Score Errors
In August 2022, a class action lawsuit was filed against Equifax by Nydia J., a woman from Florida who said she was denied a car loan because of a 130-point error on her credit score.
She claims that she was pre-approved for the loan in April 2022, where she expected to pay roughly $350 a month. But when Equifax sent the wrong credit score to her lender, the loan was denied, and she was forced to apply for another loan that cost over $500 a month.
Equifax Sent Out Incorrect Credit Scores for Millions of People
Equifax blamed a “coding error” on a big mistake that is causing financial chaos for thousands of consumers. The impact is huge. Many of those consumers missed out on a loan they needed to buy a home or car, or they are paying unfairly high interest rates on a loan.
How Do I Know If I Was Harmed?
You may have been negatively impacted if you applied for a mortgage, auto loan, or credit card in March and April 2022. Equifax has not notified any individual people who may have been harmed by inaccurate credit scores, but there are likely several thousand people.
Equifax sent out inaccurate credit scores for 2.5 million consumers between March 17 and April 6, 2022. Not all of those consumers were harmed because some of the errors were small, just a few points off.
However, Equifax estimates that “less than 300,000 consumers experienced a score shift of 25 points or more,” which is enough to cause a loan to be rejected or pay a higher rate. Sometimes the incorrect credit score was hundreds of points off, Equifax said.
Equifax also has not named the specific lenders who received incorrect scores, but the list includes big and small banks, and non-bank lenders, including Ally Financial, JPMorgan Chase, and Wells Fargo, according to the Wall Street Journal.
Financial Chaos Caused by Wrong Credit Scores
There are many examples of financial chaos that could be caused by inaccurate credit scores. Here are just a few:
- Unable to open line of credit in an emergency
- Credit card application rejected
- Mortgage or auto loan rejected
- Paying higher interest rates
- Unable to get a mortgage refinance
- Landlords might refuse to rent out a property
- Higher student loan payments
- Home-buyers cancel contracts due to unexpectedly high interest rate
- Higher insurance payments due to credit-based insurance scores
- And more
During a 3-week period in March and April 2022, Equifax sent the wrong credit scores to lenders when consumers tried to open credit cards or get approved for mortgages and auto loans.
Millions of consumers were affected by Equifax sending out incorrect credit scores, but it was most serious for around 300,000 people who had scores that were off by at least 25 points in either direction.
Some Credit Scores Were Off By Hundreds of Points
In some cases, the errors were huge — hundreds of points off, according to Equifax.
For example, Equifax told lenders that some people with a good credit score in the 700s had no credit score at all, which easily could have resulted in a loan being rejected, or at least bigger monthly payments due to an unfairly high interest rate.
On the flip side, someone with extremely bad credit could have been approved for a big loan with lower interest rates based on an inaccurately good credit score. It is not clear what will happen when banks discover these mistakes.
When Did Equifax Admit Their Mistake?
Equifax first disclosed the errors in the industry publication National Mortgage Review in May 2022, but the scandal did not receive widespread attention until April 2, when Equifax confirmed the mistake to the Wall Street Journal. Big mortgage institutions like Fannie Mae and Freddie Mac have recently sent out warnings.
What is Equifax?
Equifax is one of three major consumer credit reporting agencies in the U.S., along with TransUnion and Experian. These companies provide lenders with financial history and a credit report (which includes a credit score) when Americans seek loans and credit cards.
What is a Credit Score?
A credit score is a number between 300 and 850. People with higher credit scores are more likely to get approved for loans. Other terms of the loan agreement are usually better, such as lower interest rates.
Can I Join a Class Action Lawsuit?
The Clark Firm, LLP is nationally recognized as a class action law firm in Texas. We specialize in helping individuals seek justice and financial compensation when they have been wronged. If you had:
- A loan rejected
- Credit card denied
- Paid an unfairly high interest rates
- Other financial harm
We may be able to help you file a lawsuit or join an Equifax class action and seek reimbursement from Equifax.
About Class Action Lawsuits
Class action lawsuits are useful when a lot of people have similar legal claims. The “class representative” files the class action on behalf of everyone who was harmed in their state. If compensation is awarded, everyone in the class action shares the payout and other benefits.
Need an Equifax Lawyer in Texas?
Collen A. Clark is a true advocate for his clients and is passionate about helping Texans that have been injured or wronged.
Collen’s amazing success in the courtroom and well known dedication to his clients has earned him the recognition of his peers as one of The Top Trial Lawyers in Texas.”
The Clark Firm has assembled a team of trial lawyers with more than 100 years experience, participation in over 600 jury trials and $260 million in verdicts and/or settlements. Please use the form below to contact our law firm for a free case review.