Last week we published our podcast with SaraEllen Hutchison, talking about credit reporting and how it affects consumers. And in a bizarre twist of fate, Equifax is in the news this week for having send lenders incorrect credit scores for millions of people this spring.
The full details are not yet known, but it appears that about 12% of all credit scores released from March 17 to April 6 may have been incorrect — some by as much as 25 points or more.
Equifax calls it a “coding issue” — a highly sanitized way of describing a screw up that likely caused many would-be borrowers to be denied credit, or to receive higher lending rates than they otherwise would have.
This is hardly Equifax’s first — or worst — incident in recent history. Back in 2017, Equifax suffered a breach resulting in the compromise of the personal information of 150 million people.
As esoteric as credit reporting and credit scores may seem, they have real-world and concrete consequences. Without approval for a loan, most people can’t buy a house or even a car. A few percentage points difference in a mortgage rate can noticeably increase a person’s monthly mortgage payment, leaving them less money to afford other things.
But at least Equifax fixed its “coding issue.”