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Equifax Credit Scores Glitch Still Being Analyzed

Steve Goode
Jun 16, 2022
Equifax

Coding issues affected about 12% of potential borrowers.

Equifax officials continue to work with clients in the mortgage industry and others to address a credit scoring error that affected some lenders and potential borrowers earlier this year.

The consumer credit reporting agency notified lenders last month that a coding issue introduced during a technology change to its legacy online model platform may have resulted in the miscalculation of certain credit attributes for about 12% of credit scores.

Equifax officials provided an update Thursday to National Mortgage Professional, which reported on the issue in May.

“Our analysis indicates that there was no shift in the vast majority of scores during the timeframe of the coding issue,” said an Equifax official who asked not to be named. “We have proactively notified our customers and resellers and are working closely with individual organizations on analysis.”

NMP was first alerted to the issue by a source who works in the credit resale industry but requested anonymity. The source shared information that was provided by Equifax to resellers.

According to the industry source, Equifax acknowledged to resellers and lenders that for some transactions, certain attribute values — such as “number of inquiries within one month” or “age of oldest tradeline” — were potentially incorrect.

According to the source, Equifax claimed that no underlying credit data was affected, but acknowledged that the error affected all mortgage clients who received consumer scores utilizing the online model platform from March 16 to April 6, 2022. 

Some customers of both government-sponsored enterprises, Fannie Mae & Freddie Mac, were affected by the error.

Freddie Mac officials said Thursday that the lender continues to analyze the impact of the Equifax coding issue and will issue additional guidance after that analysis is completed. “Until that time, lenders may contact their Freddie Mac account team with questions specific to Freddie Mac’s Industry Letter issued June 2, 2022,” the official said.

In the letter, Freddie Mac officials reminded sellers of their obligations under the agency’s seller/servicer guide “to ensure the accuracy of the credit data submitted to Loan Product Advisor and delivered to Freddie Mac at the time of sale, and to provide any corrected information to Freddie Mac.”

In light of this issue, the letter said, sellers should consult with their counsel in reference to updating credit reports. 

“Sellers should also work with their consumer credit report provider and Equifax to identify the potential impacts of the coding issue on their originations and direct questions about the coding issue or its impacts to them,” the letter said.

Fannie Mae officials said Thursday that they, too, continue to analyze the impact and would issue further guidance. Fannie Mae also informed its sellers of its obligations to ensure accurate credit data.

The credit score issue also has drawn the attention of the Consumer Financial Protection Bureau (CFPB), a federal government agency responsible for consumer protection in the financial sector.

“We are aware of the issue and are assessing the situation,” a CFPB spokesperson said.

At the time of the initial report, NMP's source said that Equifax was not notifying consumers possibly affected by the error, but was offering lenders who have closed on a loan and still owned it a free credit report.

Equifax officials did not respond to questions about notifying consumers or providing free credit reports.

According to the source, Equifax had accelerated its migration from the affected platform to the Equifax Cloud and expected it would be completed during the second quarter of the year.

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