Equifax issued wrong credit scores for "millions" of customers, report says
Equifax this spring sent out incorrect credit scores for millions of customers applying for home and auto loans, the Wall Street Journal reported on Tuesday.
As one of three major credit-reporting companies in the U,S., Equifax provides financial information and scores for consumers, affecting whether people are approved for products incuding mortgages, credit cards and car loans, and what interest rate they pay. Most credit ratings range from 300 to 850, with higher-scoring consumers getting more favorable terms.
The Journal reported that millions of Americans were affected by Equifax's error, with some scores changing by as much as 20 points in either direction — enough for some prospective borrowers to be rejected for a loan. According to the paper, a small number of people went from having no credit score to having a score in the 700s, or vice-versa. The incorrect scores were sent to Ally Financial, JPMorgan Change and Wells Fargo, among other lenders, the Journal reported, citing unnamed sources.
In a statement on its website, Equifax said it fixed the error, which it referred to as a "coding issue."
"We know that businesses and consumers depend on our data and Equifax takes this technology coding issue very seriously. We can confirm that the issue has been fixed and that we've been working closely with our customers on analysis to best meet the needs of consumers," the company said.
Equifax also said that underlying credit report information did not change. "[T]here was no shift in the vast majority of scores during the three-week timeframe of the issue," the company said. "For those consumers that did experience a score shift, initial analysis indicates that only a small number of them may have received a different credit decision."
The news was previously reported by National Mortgage Professional, a trade publication, in May. Equifax CEO Mark Begor acknowledged the error at a financial conference in June.
"We had a coding issue that was a mistake made by our technology team in one of our legacy applications that resulted in some scores going out that had incorrect data in it. And we fixed the issue," he told attendees, according to a transcript of the event.
Begor added that the company was working with affected consumers, noting, "We think the impact is going to be quite small, not something that's meaningful to Equifax."
Equifax was previously implicated in a 2017 data breach that exposed sensitive information of nearly 150 million Americans and resulted in the ouster of the company's then-CEO. Equifax paid $700 million in fines and restitution after the breach.
Here are 4 things to expect if President Joe Biden enacts student loan forgiveness.
Here’s what you need to know — and what it means for your student loans.
Student LoansPresident Biden is only weeks away from making one of the biggest announcements of his presidency. By August, Biden will decide whether to enact wide-scale student loan forgiveness for millions of student loan borrowers. The White House has denied that Biden has decided to cancel student loans. However, leaked documents from the U.S. Department of Education show a detailed plan to enact broad student loan cancellation. If Biden cancels your student loans, here are 4 things to expect.
1. You could get $10,000 of student loan forgivenessIf there is broad student loan relief, expect $10,000 of student loan forgiveness. Throughout his presidency, Biden campaigned on this amount of student loan cancellation and messaged $10,000 of student loan forgiveness. After Congress failed to pass legislation, Biden could act through executive action or rulemaking at the U.S. Department of Education. Some progressive lawmakers in Congress want Biden to cancel $50,000 of student loans. However, Biden hasn’t given any indication he supports $50,000 of student loan cancellation.
2. Student loan forgiveness could be automaticWith three important deadlines for student loans approaching, Biden could decide to make student loan forgiveness automatic. Based on a proposed plan from the U.S. Department of Education, you could automatically get broad student loan forgiveness if the Education Department has your income information. In that case, expect student loan cancellation in as soon as 45 days. If the Education Department doesn’t have your income information, one proposal is to allow you to apply online and self-report your income. In either case, the Education Department says it’s prepared to implement broad student loan relief for millions of student loan borrowers.
3. You may not qualify for student loan cancellationWhile virtually everyone qualifies for a federal student loan, this doesn’t mean you will automatically qualify for Biden’s student loan forgiveness. Based on leaked documents from the U.S. Department of Education, the good news is that the requirements to qualify are more generous for student loan borrowers. For example, the leaked plan shows that all federal student loans — including FFELP Loans, Perkins Loans, Parent PLUS Loans and Grad PLUS Loans — could be eligible for student loan forgiveness. That said, private loans won’t qualify for student loan relief. The Education Department also is considering an income threshold of $150,000 per individual and $250,000 per family to get student loan forgiveness. This threshold could limit how many student loan borrowers ultimately get their student loans canceled.
4. Not all your student loans may be canceledImportantly, broad student loan forgiveness may only cancel some of your student loans. Most student loan borrowers will still have significant student loan debt after any wide-scale student loan relief. Therefore, unless you have less than $10,000 of student loans, consider wide-scale student loan relief as partial student loan forgiveness. This means you need a game plan to pay off student loans beyond student loan cancellation. For example, student loan refinancing, income-driven repayment or other student loan forgiveness are all viable options. Here’s how to pay off student loans and save money:
Student loan refinancing (lower interest rate + lower payment)
Income-driven repayment (lower payment)
Student loan forgiveness (federal student loans)
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