Nydia Jenkins’ credit score had fallen by 130 points by the time she applied for an auto loan in the spring of 2022. She had made all of her payments. She hadn’t taken on any new debt. Other than the fact that Equifax, one of the three organizations that subtly influence the financial outcomes of millions of Americans, had a coding issue that it had not disclosed to her, nothing had changed in her financial life. In the end, her financing costs were much higher. Four years later, that experience is at the core of what lawyers are referring to as the biggest class-action settlement ever achieved under the federal Fair Credit Reporting Act.
A proposed $100 million settlement involving approximately four million customers whose credit scores were impacted by a coding error between March 17 and April 8, 2022, has been approved by Equifax. Due to the error, some credit attributes and scores that were reported to lenders were not accurate. The timing couldn’t have been worse for those applying for credit cards, auto loans, or mortgages during those three weeks. Early in 2022, the housing market was expanding quickly. Prior to the Federal Reserve starting its hiking cycle, interest rates were still comparatively low. On the dotted line, people were signing. It turns out that some of them were doing so with incorrect numbers associated with their names.
According to reports, the scores of about 300,000 customers were at least 25 points off from what they should have been. This difference is significant enough to force a borrower into a worse pricing tier or result in their denial. When you consider it in human terms, it’s difficult not to feel the weight of that: a young professional financing a car for work, a family stretching to purchase their first home, everyday decisions influenced by data that was subtly incorrect. Equifax continues to deny breaking federal law and has denied any wrongdoing. Before payments are made, a federal judge must still approve the settlement.
There are other legal issues Equifax is currently dealing with in addition to this $100 million case. About 37,000 customers who allegedly had duplicate negative items added to their credit reports in 2022 are covered by a different, smaller settlement of $2.2 million. The case, Bradberry v. Equifax, is based on allegations that the agency violated the Fair Credit Reporting Act by “negligently and recklessly” including damaging and false information. Charmayne Bradberry, the plaintiff, claimed that a significant decline in her credit score prevented her from being granted a mortgage. In that scenario, eligible claimants could get up to $600 in addition to six months of credit monitoring from Equifax. The filing deadline is September 1, 2026.
The purpose of the Fair Credit Reporting Act is to avoid circumstances such as these. It gives consumers the right to contest errors and pursue legal remedies when credit reporting agencies fail them, and it mandates that these agencies adhere to reasonable procedures to ensure accuracy. It’s a protection, in theory. In reality, it can take years of litigation to make a difference. After state investigators discovered that the same 2022 coding error had impacted over 77,000 New Yorkers, the New York Attorney General and Equifax reached a $725,000 settlement in January 2025. The legal ramifications have been mounting piece by piece.
The precise amount that each consumer will receive from the $100 million fund is still unknown. The first deductions are for legal fees, administrative expenses, and other expenses. The remaining funds are distributed pro rata to those who submit legitimate claims, so the total amount is determined by the number of actual participants. Customers affected by the 2022 error who reported it to a third party in relation to a transaction involving credit may qualify. It’s worthwhile to review your records from that time period and keep an eye out for official settlement notifications if you think you were impacted.
The larger picture here is unsettling in some way. Credit scores affect a person’s ability to rent an apartment, purchase a car, or even buy a home. Although the organizations that uphold them are mostly hidden from the public, their mistakes have a very noticeable impact on people’s lives. TransUnion was hit with a $23 million FTC and CFPB settlement in 2023 due to false eviction notices showing up in background checks, so Equifax is not alone in this. The system isn’t as severely flawed as people sometimes think. It simply has silent weaknesses, which seem to require years of litigation, record-breaking settlements, and a large number of people who chose to reject what they were told in order to be fixed.
