Equifax, one of the three major credit bureaus, announced that a computer coding error led to a miscalculation of consumer credit scores in the three-week period between March 17 and April 6. 25 points. Equifax said in a press release that changes in credit scores were not shown in credit reports.
While the error causes scores to shift in positive and negative directions, a 25-point drop in your credit score can do some significant financial damage, especially if you’re on the cusp of one of the credit bands. For some consumers, that could mean less access to financial services and products like car loans and mortgages, as well as credit cards with good terms.
We spoke to credit experts and consumer advocates to determine what you should do in the wake of this Equifax error. From checking your credit score to contacting lenders, we’ve got you covered.
How to check if you have been affected
It may not be easy to determine if you have been affected by the Equifax error. “With the naked eye, a consumer would never know they were affected, for good or bad,” credit expert John Olzheimer said in an email.
Equifax says it is “collaborating with our customers to determine the actual impact on consumers,” although it is unclear how and when, if any, they will inform affected customers.
“It’s not the consumer’s fault,” says Chi Chi Wu, an attorney at the National Consumer Law Center. “It is disgraceful that a mistake by Equifax harmed consumers, and they now have to go back and fix it.”
Next steps for consumers
Follow these steps to help protect your score in the wake of the Equifax error:
Review any notices regarding rejected applications during this period
If you applied for a car, home, or credit card loan between March 17th and April 6th and your application was rejected or had to pay more – likely as a result of this wrong result – you may have some recourse if you receive one of the documents below:
Malicious Action Notice: If your application is denied, you must have received a Notice of Negative Action. Federal law requires creditors to tell you why your application was denied and the office they got their information from, so it’s important to review this letter to understand if a coding error affected you.
If you were rejected “because of things that came up on your credit report, if it’s about your credit score in some way, shape, or form, it’s worth going back and pulling a copy of your credit report and your credit score,” says Bruce McClary, senior vice president. It’s also worth “knowing the credit score the creditor used to rate you,” he says.
Pricing by Risk Notice: If you applied for a loan or credit card during this period and were given less favorable terms (for example, higher interest rates), you should have received a risk-based pricing notification.
If consumers apply for a credit card or loan during this time and do not receive one of these two notices, according to Olzheimer, they are “neither refused nor passively approved on unfavorable terms”.
Check your Equifax credit report
Checking your credit report should be your next step. Here, you’re looking to see if a tricky query — or a request to check your balance — pops up. This “hard pull” is confirmation that you applied for credit within the three-week time frame when the error was not detected by Equifax.
Objecting the error with Equifax is not an option since the incorrectly calculated scores did not appear on the credit reports. “There was nothing wrong with their Equifax credit reports that require investigation and correction,” Ulzheimer said. “This was a software bug that was not affected by how the consumer behaves or pays their bills.”
Contact the lender and Equifax
If you are affected, contact the lender and ask them to re-evaluate your application or loan terms.
According to Wu, making changes to credit card rates will be easier than changing the terms of a mortgage or car loan.
If you think you may have been affected, you can also try calling Equifax Customer Service at 1-888-378-4329.
Be on the lookout for a message from Equifax
Keep an eye out for more communications from Equifax. “It is the responsibility of the credit bureau to notify the people affected and to provide some actions that people can take to address any issues arising from this incident,” McClary says.