What an Equifax credit score error means for you

(NerdWallet) – Equifax, one of the three major credit bureaus, announced that a computer coding error resulted in incorrect credit score calculations for consumers in the three-week period between March 17 and April 6.

For 300,000 consumers, the error shifted credit scores by as much as 25 points. Changes to credit scores do not appear on credit reports, Equifax said in a Press release.

While mistakes cause the score to move in positive and negative directions, a 25-point drop in your credit score can do some major financial damage, especially if you are on the cusp of one of credit tape. For some consumers, that could mean less access to financial services and products like car loans and home mortgages, as well as credit cards with good terms.

We spoke to credit experts and consumer advocates to understand what you should do after this Equifax error. From checking your credit score to contacting lenders, we’ve got you covered.

How to tell if it has been affected

It may not be easy to determine whether you are affected by this Equifax error. “To the naked eye, consumers may never know they are being affected, for better or for worse,” said credit expert John Ulzheimer in an email.

Equifax said it was “collaborating with our customers to determine the actual impact on consumers,” though it was unclear how or when they would notify affected consumers, if at all.

“This is not the consumer’s fault,” said Chi Chi Wu, a lawyer at the National Consumer Law Center. “And it’s a shame that a mistake by Equifax hurt consumers and now they have to go back and fix it.”

The next step for consumers

Follow these steps to help your score after an Equifax error:

Review any notices related to rejected applications during this period

If you applied for a car or home loan or a credit card between March 17 and April 6 and your application was rejected or you had to pay more – potentially as a result of this miscalculated score – you may have some recourse if you receive one of the following documents:

Adverse action warning: If your application is rejected, you must accept it Adverse action notice. Federal law requires creditors to tell you why your application was denied and which bureau they received the information from, so it’s important to review this letter to better understand if a coding error affects you.

If you’re denied “because of something that shows up on your credit report, if it’s related to your credit score in some way, shape or form, then it’s worth going back and pulling a copy of your credit report and your credit score. ,” says Bruce McClary, senior vice president of communications for the National Foundation for Credit Counseling. It is also worth “finding out what credit score the creditor is using to evaluate you,” he says.

Risk-based pricing notice: If you apply for a loan or credit card during this period and are offered less favorable terms (for example, higher interest rates), you should receive a risk-based pricing notice.

If the consumer applies for a credit card or loan during this period and does not receive one of these two notices, then, according to Ulzheimer, “they are not rejected and they are not approved with less terms.”

Check your Equifax credit report

Check your credit report should be your next step. Here, you find out if any hard questions – or requests to check your credit – come up. “Hard pull” This is confirmation that you applied for credit during the three-week time frame when the error went undetected by Equifax.

Disputing the error with Equifax is not an option because the miscalculated score does not appear on the credit report. “There are no errors on Equifax credit reports that require investigation and correction,” Ulzheimer said. “This is a programming error that does not affect how consumers act or pay their bills.”

Contact your lender and Equifax

If affected, contact your lender and ask them to re-evaluate your application or loan terms.

Getting a rate change on a credit card will be easier than changing the terms of a mortgage or car loan, according to Wu.

If you believe you 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

Stay tuned for further communication from Equifax. “The onus is on the credit bureaus to notify people who are affected and to provide some actions that people can take to resolve the issues that arise from this crash,” McClary said.

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