Equifax simply cannot stay away from the news. On August 2, the company released a statement saying a coding error led consumers to poor credit scores. The algorithm issue occurred between March 17 and April 6, with approximately 300,000 consumers scoring up 25 points, or worse, down 25 points. And consumers are rightly worried about it.
And that follows the 2017 data breach that affected an estimated 147 million consumers. To compensate for the breach, Equifax offered credit monitoring services to the victims.
Were you one of the 300,000?
The most pressing question on the minds of most consumers is whether they have been affected. And unfortunately, the answer is not as clear cut as one might think.
“There is absolutely no way a consumer would know if their scores were higher or lower during this 3-week period due to the scheduling issue,” says credit expert John Ulzheimer, author of The smart consumer’s guide to good credit. You should have Good Will Hunting knowledge of scoring models and know exactly how Equifax misprogrammed your credit report, he adds.
However, there is a roundabout way of trying to figure it out. And it starts by asking yourself: have you applied for credit? Credit here means you applied for a new rewards card, mortgage, home refinance, or car loan within that three-week period. If your answer is yes, the next thing you need to ask yourself is: was your application denied or approved at higher interest rates than you expected? Finally, you need either your ‘adverse action notice’ or your ‘risk-based pricing notice’, which details the terms and conditions to which you have been approved. Both should state what report was written by the lender to determine your eligibility for the loan.
If you answered yes to the credit application and the lender pulled your Equifax report, contact the lender and ask if your application was affected by the coding issue.
What about my Equifax (and other) credit reports?
If you’re concerned about your actual credit report, there’s a silver lining. The information in your Equifax, as well as your Experian and TransUnion, has not been affected and should be accurate. Remember, this is a programming problem, Ulzheimer says. It has nothing to do with the accuracy of your Equifax report or the credit score model used, he adds.
However, that doesn’t mean you shouldn’t quickly review your credit reports and correct any errors. From now until December 31, 2022, you are allowed to download your credit reports from Experian, Equifax and TransUnion on a weekly basis from annualcreditreport.com. You want to check each report for erroneous information and dispute any issues using the credit bureaus’ online dispute form.
What if the lender uses a different report?
If any of your “adverse action notices” or “risk-based pricing notices” indicate that your claim was determined using your Experian or TransUnion report, the lender may legitimately consider you a risk. .
If so, you need to raise your credit score through healthy credit habits. This includes paying your credit card and other loans on time, as well as keeping your credit utilization rate below 30%.