Equifax Agrees to $100 Million Settlement Over Credit Score Error: Are You Eligible for a Payment?
About 4 million people could be eligible for payments after a coding error allegedly caused Equifax to send inaccurate credit scores to lenders.
Equifax has agreed to create a $100 million settlement fund over allegations that a coding error caused it to send inaccurate credit scores to lenders in 2022. Roughly 4 million people could be covered by the settlement.
Claims aren't open yet. The proposed settlement still needs final court approval, with a hearing scheduled for January 22, 2027. If approved, eligible consumers will receive information about how to submit a claim for payment.
Equifax has denied wrongdoing, and the settlement does not constitute an admission of liability. Here's what to know about the proposed settlement, who may qualify and what happens next.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
What happened with Equifax credit scores?
According to DiCello Levitt, one of the law firms representing consumers in the case, Equifax misreported lower credit scores for about 4 million people who applied for mortgages, auto loans or credit cards between March 17 and April 6, 2022. The coding error resulted in some lenders receiving inaccurate credit scores.
That matters because lenders use credit scores when deciding whether to approve applications and what interest rates and terms to offer. The lawsuit alleges that some applicants were denied credit, charged higher interest rates or otherwise received less favorable terms because of the incorrect scores.
Equifax has maintained that most scores didn't change substantially. The company previously said fewer than 300,000 people experienced a score change of 25 points or more, according to ConsumerAffairs.
Who could qualify for the Equifax settlement?
About 4 million people are estimated to be included in the settlement class. The settlement covers consumers whose credit scores were inaccurately reported because of the coding error.
You may want to pay particular attention to the settlement if you applied for credit during the affected period, including a:
- Mortgage
- Auto loan
- Credit card
- Other credit product
This may be especially relevant if you were unexpectedly denied credit, received a higher interest rate or were offered less favorable terms. However, simply applying for credit during the affected period doesn't necessarily mean you're eligible for a payment.
More information about eligibility and the claims process is expected as the settlement moves toward final approval. We’ll update this story as new details, including how to file a claim, become available.
How much money could you receive?
The proposed settlement creates a $100 million fund that will be used to make payments to people who submit valid claims. However, no individual payment amount has been announced.
How much each person receives will depend on factors including the number of valid claims submitted and how much money remains after court-approved legal fees, administrative costs and other expenses are deducted.
The settlement fund is non-reversionary, meaning money left over from the claims process won't be returned to Equifax.
Can you file an Equifax settlement claim yet?
No. Those affected can't file a claim for the Equifax settlement yet. The proposed settlement has received preliminary approval. This means the case can move forward, but claims aren't open and no payments are being distributed yet.
Once the court approves the settlement notice, people covered by the settlement are expected to have 90 days to submit a valid claim. More information about how to file, eligibility requirements and important deadlines should be provided as the settlement moves forward.
A final fairness hearing is scheduled for Jan. 22, 2027. At that hearing, the court will consider whether to grant final approval to the settlement.
In the meantime, be cautious of emails, texts or websites claiming they can get you an Equifax settlement payment now. Don't pay anyone to file, secure or expedite a claim on your behalf.
What should you do now?
Since claims aren't open yet, there's nothing you need to file right now. However, if you applied for credit during the affected period, it's worth holding on to any records you still have from that application, particularly documents showing a denial, interest rate or other terms you were offered.
Keep an eye out for an official settlement notice with information about eligibility, deadlines and how to submit a claim. Be cautious of unexpected emails or texts promising an immediate payment, especially if you're asked to pay a fee or provide sensitive financial information.
A credit score is only one part of your financial picture
Your credit score can influence the rates and terms you're offered when you borrow, but it's only one piece of your overall financial health. A financial adviser can help you look at the bigger picture, from managing debt and building savings to planning for retirement and other long-term goals.
Use the tool below to connect with a vetted financial professional and get started today:
Related content
