Worried About Your Equifax Credit Score? Here’s What to Do

Earlier this year, Equifax EFX -6.17%

sent lenders inaccurate credit scores for millions of potential borrowers over a three-week period. Now many who applied for home or other loans at the time are wondering if they were affected by the bug.

The information that credit reporting agencies like Equifax add to consumers’ credit reports includes the types of consumers’ financial accounts, the accounts they open and close, their payment history, and more. This information results in a credit score, one of the key factors that lenders refer to when deciding on loan applications.

In the Equifax bug, some people applying for mortgages, car loans, and credit cards had their scores decreased or increased by 20 points or more. Maxine Waters, a senior Democrat and chair of the House Financial Services Committee, wrote a letter asking the Consumer Financial Protection Bureau to stop Equifax from selling credit scores to lenders until it can ensure its scores are accurate.

A credit rating shift of this magnitude could change the interest rates offered or even cause their applications to be denied.

“It was a big number [of people affected]and that’s why it’s scary,” said Ralph DiBugnara, mortgage banker and president of Home Qualified, a digital resource for real estate agents, buyers and sellers.

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Mr DiBugnara said his firm had received calls from concerned customers. Many want to know if their credit history was accurate, while others ask a variety of other questions. Below are answers to some of the most common questions.

When did that happen?

The inaccurate results were sent out between March 17 and April 6, 2022, according to Equifax. The company then began alerting lenders to the errors in May.

“We determined that there was no shift in the vast majority of results during the three-week period of issuance,” said Sid Singh, president of Equifax’s US Information Solutions, in a company statement. “For those consumers who experienced a change in score, initial analysis indicates that only a small number of them may have received a different credit decision.”

How would that have affected my mortgage?

Mortgage lenders typically get credit reports from all three agencies: Experian, TransUnion, and of course, Equifax. Typically, lenders look at all three ratings and create a “combined” rating, said Guy Cecala, executive chairman of Inside Mortgage Finance. They then decide whether the application will be approved and what interest rate will be offered.

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“The bottom line is that the impact of an Equifax failure is somewhat diluted because they use three,” he said.

A shift like this will not have resulted in so many people being turned down for mortgages by mistake, Mr Cecala said. A lender is required to send a refusal notice if you are declined for a loan, so read that notice to understand why.

The more likely hazard: Such a mistake could have affected the offered interest rate on the loan, leading to higher interest rates and, as a result, higher mortgage payments.

How do I know if I am one of the affected consumers?

If you applied for a mortgage, car loan, or new credit card at any time within the above timeframe, your score may have been impacted.

The first thing you need to do is contact your lender, said Gordon Miller, founder of Miller Lending Group in Cary, NC. Ask to review your mortgage file and see if an Equifax credit score was used in any way in the underwriting process. Check this score and compare it to the other two. If something is wrong – it’s much lower than the others, for example – then you and your lender can discuss what that means for your loan.

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What do I have to do if I want to apply for a loan in the coming months?

Mr. DiBugnara recommends setting up alerts with each of the three credit bureaus. That way, if your score changes significantly at a later date, you’ll be notified immediately.

SHARE YOUR THOUGHTS

What questions do you have about Equifax’s errors? Join the conversation below.

Examine your creditworthiness with a magnifying glass. If your score has changed significantly, you should take a close look at the factors reported in the report or the factors that the lender says contributed to the change. Such factors may include late payments or the opening or closing of new lines of credit.

“Don’t take the number at face value,” Mr. Cecala said. “If you say, ‘Huh, I didn’t make any late payments,’ then you have to dispute that.”

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How do I challenge my credit score?

If you suspect there is an error anywhere in your credit report from Equifax or any of the other reporting companies, Mr. DiBugnara recommends filing a formal dispute directly with the offending company first. Each of the firms has a dispute resolution department that allows you to file a claim directly with the agency.

Be sure to include a copy of the report with your claim and explain why you are contesting the information and why you would like it corrected or removed from your report. The Consumer Financial Protection Bureau provides a list of instructions and a sample letter that you can use when filing your claim.

Each of the companies is required to investigate your claim and then report back. If your request to update or remove the information is denied, you can still ask the agency to update your file with a statement explaining the dispute.

Write to Julia Carpenter at [email protected]

Corrections & Enhancements
The Consumer Financial Protection Bureau provides a list of instructions and a sample letter for filing a disputed credit report claim. An earlier version of this article incorrectly referred to the agency as the Consumer Finance Protection Bureau. (Corrected on August 9th.)

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