BREAKING! Equifax Data Disaster: Everything You Need to Know

Hey, everyone. I've got important news for you. If you or your customers were denied loans or given very high interest rates earlier this year, the credit bureau Equifax may have been at fault. A coding error resulted in Equifax giving out millions of incorrect credit scores. And today I'm going to talk about who was affected, who was at fault, and and what you can do about it. So you better stick around.

My name is Daniel Rosen and welcome to Credit Repair Business Secrets.

Okay, if this is your first time listening to my podcast, every week I cover industry news, financial tips, and entrepreneurial advice for bootstrapping your business from nothing. This show is the best how to guide for business owners and there is no other podcast like it's. So be sure to click that subscribe button now and get ready to start changing lives. Okay, so last week the credit bureau Equifax admitted that a coding error caused them to send millions of inaccurate credit scores to lenders. Okay, this was terrible. The error took place between March 17 and April 6 of this year and scores were were incorrectly raised or lowered by more than 20 points. And that can really make a difference. So today I'm going to go over how this happened, who's at fault, how people were affected, and what you can do about it. But before we get started, this podcast.

Is brought to you by Credit Hero Score.

Credit Hero Score is the only credit monitoring service that integrates directly with credit repair Cloud. Get instant access to your credit reports and scores by signing up for a seven day trial for only $1. Sign up right now at creditheroscore.com okay, let's get into this. According to the press release from Equifax, this big error took place between March 17th and April 6th of this year. And the issue was fixed on April 6th. That's what they say. Now, the Wall Street Journal reported that incorrect scores were sent to Ally Financial, JP Morgan, Wells Fargo and other lenders. And during that three week window, people went from having no credit score at all to a credit score in the 7 hundreds or vice versa. It was a huge mess. And Equifax claims that less than 300,000 consumers experienced a a score shift of 25 points or more and that the scores have been since readjusted. Now, they added, while the score may have shifted, a score shift does not necessarily mean that a consumer's credit decision was negatively impacted. But the truth is, they don't know how it affected people yet. And they're already starting to feel the public's justifiable anger but it's not just people who are angry. Senators Elizabeth Warren, Mark Warner, House Representative Raja Krishnamurti. They are all demanding that Equifax be held accountable, which they stated in a letter to the Equifax CEO Mark Beggar. They said your company owes the public a clear and transparent explanation for why and how it made such grievous errors to the scope of the errors and why you have failed to notify affected consumers of these errors. So what does this mean to us? Well, while some people saw their score shift up, those who saw a drop of 25 points or more, they may have received higher interest rates or they may have been denied financial services, car loans, house mortgages, as well as credit cards. Equifax claims that initial analysis indicates that only a small number of them may have received a different credit decision. But that would require them to investigate the details of every single credit decision made during that three week window. For example, a lawsuit has already been filed stating that a Florida resident, Nydia Jenkins, was pre approved for a car loan in January, but her loan was denied in early April because the Equifax credit score was off by 130 points. And since she was denied, she was forced to buy a car from a different dealership with a much higher interest rate. Under the initial loan, Ms. Jenkins would have paid $350 a month for that car, but now she's paying $272 every two weeks. The lawsuit demands compensation for the disparity and damages after the fact. This situation is clearly the fault of Equifax and it's their obligation to make it right. But I worry it might end up being the responsibility of individual consumers and credit professionals to spread awareness and investigate who was harmed by the error. Now, the thing to remember is this isn't even the first time that a credit bureau technical issue has impacted all of us. No, the problem goes back. For decades, the nonprofit organization PIRG has been reporting credit bureau failures and abuses all the way back to 1990. In 2004, they published a study that found that 79% of all credit reports studied contained either serious errors or other mistakes of some kind. 79%. That's like eight out of 10 reports having errors. And in 2013, the year we launched Credit Repair Cloud, 60 Minutes aired a story called 40 Million Mistakes about the 40 million people who had errors on their credit reports. And in that 60 Minute story, Ohio Attorney General Mike DeWine stated, the problem is not that they make mistakes mistakes, it's that they won't Fix the mistakes. It literally is like, you know, the guy behind the curtain in the wizard of Oz. You really don't know what he's doing. It really is a secret operation, and it doesn't seem like much has changed. In 2017, Equifax was hacked, and more than 147 million Americans had their personal data, Social Security numbers, and addresses exposed online. And I was one of those people. And because of that hack, I personally experienced several types of identity theft. Criminals opened new accounts under my name, and this forced me to freeze all of my bureau accounts. They're still frozen today. And it was horrifying and a huge hassle that's going to follow me forever now, because every time someone needs to do a credit check on me, I have to unfreeze all the accounts and and then tell them to pull my information as fast as they can so that I can refreeze them as fast as possible so that no more identity theft takes place. It's a colossal nightmare. All because they were careless with our data. Thankfully, TransUnion created a page that makes it easier to freeze and unfreeze your reports for all three bureaus, and you can find that page@transunion.com credit freeze. But it's been five years since that hack, and consumers now have another bureau error to deal with, and it probably won't be the last. Here is why this is important. According to Equifax, the error occurred while the company was transitioning to a mostly online model platform, which will provide additional controls and monitoring that will help to detect and prevent similar issues in the future. But they are only 50% of the way through that transition, and they expect to be only 80% done by the end of the year. This was all made worse by the fact that Equifax didn't release these statements until four months after the error was fixed. But they notified lenders about the issue all the way back in may that about 12% of all credit scores were affected. It's also unclear if Equifax plans to even notify the people that they know were directly affected. So fixing this problem the same way I had to freeze and unfreeze my own accounts is probably going to fall on all of our shoulders. So here's what you need to know. If between March 17 and April 6 of this year, if you or any of your customers were denied a credit card, a car loan, mortgage, or any other line of credit, it may have been a result of Equifax's mistake. If you or your customers believe that they might have been impacted by this error. Equifax suggests that people reach out to the lender who denied them and ask for more information. Now, if it's determined that the score was incorrect because of this coding error, you can file a complaint with the lender and with the CFPB as well as with your state's attorney general's office. Now, if the victim of the error is still seeking a loan, they should cite the error and request that one of the other credit bureaus be used to make the decision. Now, if between March 17 and April 6 of this year, if you or your customers were approved for a line of credit, the interest rate might have been incorrectly tabulated. So contact the lender and ask how they determine the interest rate. If it was using an incorrect credit score, you could be eligible for an interest rate adjustment and you could receive retroactive credit for the interest that you already paid based on your current rate. If you or your customers believe you were affected by this error in any way, review the credit reports that you pulled during the window between March 17 and April 6 of this year. Now, the error itself, it won't be obvious on the Equifax report. No, it was a programming error communicated between Equifax and the lenders. But if, for example, they were doing a hard inquiry during that three week window, the error may have impacted your situation relating to the inquiry, just like it did with Nydia Jenkins and her horrible car loan. So what's next? Well, according to the Wall street journal, about 2.5 million credit scores were requested by mortgage lenders during that three week error window. But because all three credit bureau reports are factored into lending decisions, it's hard to know how much impact the Equifax error actually had. And to make things worse, Equifax recommends that people pay close attention to their credit scores and even reminds consumers that they offer cred monitoring as though they didn't cause this problem. I don't know about you, but I keep wondering, what's the whole point of having credit reporting agencies if they can't be trusted to collect data, to protect data, or to provide data? Ultimately, the CFPB said it best when they warned consumers in January that the three credit bureaus have a dangerous oligopoly, which is a state of limited competition, and they've shown a pattern of poorly responding when consumers complained of errors. In other words, they agree this is an unfair system and it's been forced on us, and all we can do is fight back and demand change. So please send this episode to anyone you think needs to hear it. Credit Repair Cloud we are here to help and you are not alone. The main reason why the 1970 Fair Credit Reporting act was made into law is because credit people complained about the retail credit company's abusive investigations of consumers. And in 1975 the retail credit company changed its name to Equifax. If you believe you may have been affected by the Equifax error, you can also try calling their customer Service line at 1-888-378-4329. And just a reminder, this podcast is.

Brought to you by Credit Hero Score.

Credit Hero Score is the only credit monitoring service that integrates directly with Credit Repair Cloud. Get instant access to your credit reports and scores by signing up for a seven day trial for only $1. Sign up right now at creditheroscore.com and now for my favorite part of the episode, our community highlight. Each week I feature one of our Credit heroes inside our Credit Repair Cloud Facebook community so that you can see firsthand what real people are doing as they launch and grow their business. And today's spotlight is on Ebony Randall. Last week Ebony posted in the community hey heroes. Today is the last day of my first month in business and this month I closed 40 clients. I cannot wait to see what the future holds. Never expected that. Congratulations Ebony. Closing 40 clients in your first month? That is amazing. I like to look at it like this. A great first day becomes a great first week, which becomes a great first month and then a great first year and it just keeps going and going and going. So keep closing those clients, keep building and your future will be bright. Great work Ebony. And I'll end by saying if you don't already have a credit Repair cloud account, check it out. It's the software that most credit repair businesses in America run on. Just sign up for a 30 day free trial at creditrepaircloud.com freetrial and if you'd like me to hold you by the hand as you launch your very own credit repair business, check out our Credit Hero Challenge. It's a live experience that has helped tons of credit Heroes to get their first clients to get certified in disputing and to gain confidence as they launch their credit repair business on a solid foundation so they can change a whole lot of lives and make a great living in the process. We're starting the next challenge very soon, so you want to join before the doors close or you're going to have long wait until the next one. So sign up now@creditherochallenge.com and if you're finding value in the things that I share on this podcast, be sure to click below to subscribe and leave me your questions and your comments below because I read each and every one of them. Be sure to visit my blog if you'd like to read the show Notes. And if you have a special question that you'd like me to answer, drop it down in the comments and I'll be sure to answer it during a later episode. And remember, just because we inherited this system, it doesn't mean we are stuck with it. So keep holding these banks and bureaus accountable and keep changing lives.

Hey everybody, it's Daniel again, and really quick. I'd like to invite you to join what I believe is the best thing we have ever created inside the Credit Repair cloud community. And it is a challenge that we call the Credit Hero Challenge. If you're just planning out your business or you're just getting it started and you dream of having a successful business of your own so you can quit your 9 to 5 and fire your boss and have financial freedom, or so you can add another revenue stream to your existing business, if that's your dream, you need to get into this challenge. We created this challenge to help you to create and launch your very own credit repair business to build a proper foundation for a really successful business. This challenge is going to help you to understand the strategy, the tactics, and all the things you need to be successful at Credit Repair. It really is the greatest thing we have ever built and it will change your life. So I recommend you do it right now. Stop everything, pause this audio, go online and go to creditherochallenge.com that's creditherochallenge.com and join the next challenge. And there's a challenge that's starting in just a few days. So go get started right now@creditherochallenge.com.