Equifax notifies lenders of potential errors in credit scores – NMP
Updated at 3:30 p.m. on 05/27/22
Equifax, one of the nation’s three largest consumer credit reporting agencies, advises lenders that a coding issue introduced during a technology change in its former online templates platform may have resulted in an error calculation of certain credit attributes for approximately 12% of credit reports.
In a statement emailed to NMP this afternoon, Equifax officials acknowledged that there had been a coding issue in a program slated for replacement, which could have resulted in an error in potential calculation of some attributes used in model calculations.
Officials said data quality and accuracy are at the heart of everything Equifax does and they “take this technology issue very seriously.”
Equifax added that the company has notified customers and resellers and is working with individual organizations on the analysis. The problem has been fixed, they said, adding that the new system will provide additional controls and monitoring that will help detect and prevent similar issues in the future.
NMP was first alerted to the issue by a source who works in the resale credit industry but requested anonymity. The source shared information provided by Equifax to resellers; Equifax has yet to confirm details and did not address specifics in its comments to NMP.
According to the industry source, Equifax acknowledged to resellers and lenders that for some transactions, some attribute values — such as “number of requests in a month” or “age of oldest business line — were potentially incorrect.
According to the source, Equifax says no underlying credit data was affected, but will acknowledge that the error affected all mortgage customers who received consumer reports using OMS from March 16 to April 6. 2022. Lenders were first notified of the issue one week. ago and provided more detailed information earlier this week, the source said, citing information provided by Equifax to the credit reselling company.
The source said the two government-sponsored companies, Fannie Mae and Freddie Mac, were made aware of the issue, but only Freddie Mac has since responded to a request for comment.
Fred Solomon, director of financial communications at Freddie Mac, said Friday his company is aware of the Equifax coding issue impacting certain consumer credit data and credit scores.
“We are working with the Federal Housing Finance Agency (FHFA) to identify the impacts,” Solomon said.
Equifax, the source said, told resellers that about 88% of credit reports for mortgages using DMS during the affected period were unaffected by the coding error. The company said less than 9% experienced a change of 10 points or less; less than 3% experienced a change of 11 to 20 points; and less than 1% experienced a change of more than 20 points.
Equifax said the issue was fixed on April 8, the source said, but the credit company did not provide an industry impact assessment or relevant customer-specific details, the source said. .
The company has not advised lenders of any remedial action it will agree to provide for the erroneous reports it has provided, but should work with them to support any actions they deem necessary to address customer concerns, the source said.
Equifax, the source said, is not notifying affected consumers of the issue at this time, but will agree that any lender who has entered into a loan and still has it can request a new credit report.
Equifax, according to the source, says the problem is isolated to the OMS platform and contained by controls already in place; that it has accelerated its migration from the affected platform to the Equifax Cloud; and that it should be completed during the second quarter of the year.