Equifax shares rebound after credit score errors revealed

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Equifax confirms a coding issue miscalculated credit scores that were sent to lenders between March 17 and April 6. File photo by Justin Lane/EPA-EFE.

Aug. 3 (UPI) — Credit reporting giant Equifax’s stock is bouncing back, one day after the company confirmed a technical glitch miscalculated credit scores, as shares hit a three-month high.

Equifax stock jumped $5.54, or 2.7%, to 212.88 Wednesday afternoon on strong U.S. economic data despite losing almost $4 a share Tuesday.

The drop came after the company, which reports on more than 200 million consumers, confirmed it had sent lenders approximately 300,000 faulty credit scores.

About 12% of Equifax credit scores may have been off by at least 25 points, the company confirmed, which could have resulted in some borrowers being wrongfully denied credit for auto or home loans.

“We have determined that there was no shift in the vast majority of scores during the three-week timeframe of the issue,” Sid Singh, president of Equifax’s U.S. Information Solutions, said in a statement.

“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.

Equifax issued the statement confirming the errors Tuesday, hours after the Wall Street Journal published a report detailing the erroneous credit scores based on information from bank executives and lenders. Inaccurate scores were sent to Ally Financial, JPMorgan Chase, Wells Fargo and other lenders, according to the WSJ report.

In June, housing agency Freddie Mac issued an alert to its clients after Equifax told the agency 12% of its credit scores between March 17 and April 6 may have been inaccurate.

As early as May, trade publication National Mortgage Professional reported Equifax had warned lenders about a coding issue during a technology change to its legacy online model platform may have resulted in the miscalculation of credit scores.

The publication also reported in May that Equifax said it had notified customers and that the problem had been corrected.

Equifax is one of three major credit-reporting companies in the United States. It provides consumer financial information and credit scores, that can range from 300 to 850, to lenders.

The financial information provided determines whether consumers are approved for mortgage, auto or credit card loans, as well as what interest rates they will pay.

“Again, we do not take this issue lightly. The issue has been fixed,” Equifax said in its statement.

“We are working closely with lenders and we are accelerating the migration of this environment to the Equifax Cloud, which will provide additional controls and monitoring that will help to detect and prevent similar issues in the future.”

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