Congresswoman Maxine Waters takes aim at Equifax for issuing wrong credit scores
“People of color are negatively impacted in so many different ways. When you add to it credit scoring, it really does mean that we're not able to build the wealth,” U.S. Rep. Maxine Waters, D-Calif., tells theGrio.
U.S. Rep. Maxine Waters, D-Calif., plans to hold Equifax accountable after the credit reporting agency produced incorrect credit scores for consumers earlier this year.
“I’m calling for a moratorium as I talk with the [Consumer Financial Protection Bureau] about what they can do in order to make sure we understand who has been harmed [and] which of the big banks have taken the information from Equifax in order to make their decisions,” Congresswoman Waters told theGrio.
Emphasizing the seriousness of Equifax’s reported “coding error,” Waters proclaimed, “This is huge.”
In a statement released on Aug. 2, Equifax said it identified a coding issue that “was in place over a period of a few weeks” between March 17 and April 6. The error, the agency said, “impacted how some credit scores were calculated.”
Around 300,000 consumers were impacted by the glitch and saw a score shift of 25 points or more. Waters has condemned Equifax for the weeks-long malfunction and vowed to hold them accountable.
“Equifax has gone way beyond being irresponsible. Not only have we discovered that they have been given the wrong credit scores, it was not too long ago that there was a breach of all the privacy at Equifax,” said Waters, referring to the company’s 2017 data breach.
This latest glitch at Equifax comes five years after it disclosed that it encountered a breach that exposed the personal records of 147 million people, according to the Federal Trade Commission.
Allan Boomer, a managing partner at Momentum Advisors, one of the largest Black-owned wealth management firms in the U.S., told theGrio “it’s a damn shame that a company like Equifax would get this wrong.”
“Their one job is to keep track of someone’s creditworthiness,” he declared. “Your credit score is now a digital way for someone to know what kind of person you are.”
Dr. Melody Harvey, assistant professor at the University of Wisconsin-Madison, encourages consumers who may have been impacted by the credit score glitch to check with their financial institutions.
“If you think that you may have been a part of the glitch that occurred it’s definitely important to reach out to your bank in question. If you applied for a loan during this time frame see if there’s anything that can be done,” she explained.
Waters, who chairs the House Financial Services Committee, told theGrio that Equifax needs to be held accountable because the glitch may have caused some people great financial harm.
“Credit is very important to our lives. We can have a good quality of life based on the fact that we have good credit and we’re able to purchase those things that we need and pay for them,” she said. “Equifax, along with other credit bureaus, hold our ability to have this quality of life and so it’s important that they get it right.”
The congresswoman noted that the glitch is financially crippling for “people of color” because they are “negatively impacted in so many different ways.”
“When you add to it credit scoring, it really does mean that we’re not able to build the wealth and to pass on the wealth or use that wealth to invest in businesses or to send kids to school,” said Waters.
Boomer told to theGrio that “credit scores really impact so many things. I think folks think about it relative to buying a car and buying a house. But, it’s way more than just those financial transactions.”
He explained, “It also can impact certain employment opportunities. Imagine you were renting for a moment. People with bad credit have to make bigger down payments to their landlords. Also, bigger down payments for things like utilities that can add five to ten thousand dollars to your budget,” he explained.
Waters believes that if consumers are denied a loan or a manageable interest rate, they should double-check with the loan provider to identify any errors.
“If you’re told that your credit score is in the 600s instead of the 800s, force somebody to have to talk to you and say, I don’t think that’s true, where did you get that information? Are you sure you have my name mixed up? You know, they make a lot of mistakes. So the first thing to do is don’t walk away,” she instructed.
Boomer told theGrio that he has seen credit bureaus get it wrong firsthand.
“You know, it’s funny, my parents and I, and one of my brothers, we all have the same initials. Our stuff ends up on each other’s credit reports on a regular basis. Check your credit score regularly to see if there’s any discrepancies on your report, whether good or bad.”
Boomer referenced a 2020 report from PR newswire, which revealed that “just 33% of Americans check their credit reports in the past year.” He said that “implies that 67% of Americans do not or did not check their credit score in the last 12 months … so you really have to check it on a regular basis.”
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