Equifax has agreed to pay $100 million to settle a class-action lawsuit accusing the credit bureau of sending erroneous credit scores to lenders during a three-week coding glitch in 2022, a proposed settlement filed in federal court in Atlanta on Wednesday. The malfunction in the company's Online Model Server allegedly skewed credit scores and other credit attributes for millions of consumers, with lenders processing auto loans, mortgages and credit card applications receiving distorted borrower profiles.
The proposed class covers consumers nationwide whose credit scores or credit attributes were affected by the coding issue and reported to a third party in connection with a credit-related transaction, according to WSB-TV. The settlement class is estimated to include roughly four million individuals, and the agreement came after nearly four years of discovery, litigation and settlement negotiations. Equifax has denied wrongdoing and denied violating the Fair Credit Reporting Act or engaging in unlawful conduct, according to court records, saying it agreed to settle to avoid the expense and uncertainty of prolonged litigation.
How the Glitch Distorted Millions of Credit Files
The coding error occurred between March 17, 2022, and April 8, 2022, causing certain credit scores and attributes reported by Equifax to differ from what they otherwise would have been. Reporting and corporate statements from that period indicated the three-week glitch altered scores for approximately 300,000 consumers by 25 points or more, a shift large enough to bump a borrower into a higher interest rate tier or trigger a denial altogether, per Business Insider. Major lenders including Wells Fargo, JPMorgan Chase and Ally Financial were among those that received the distorted credit profiles.
Early federal court complaints detailed the human cost of those errors. Lead plaintiff Nydia Jenkins reported that her credit score suddenly dropped by 130 points, resulting in a rejected auto loan and forcing her into a significantly pricier replacement loan, as reported by CBS News. More broadly, affected consumers could have been denied a loan or charged a higher interest rate as a direct result of the coding error, the settlement filing states.
Largest FCRA Settlement on Record, Attorneys Say
Plaintiffs' attorneys have called the deal the largest class-action settlement ever achieved under the Fair Credit Reporting Act, a federal law that requires credit reporting agencies to follow reasonable procedures ensuring maximum possible accuracy of consumer credit information, according to Legal Reader. The statute establishes civil liability and statutory damages for willful or negligent violations, which underpins the scale of the payout.
The non-reversionary $100 million fund will cover attorneys' fees and administrative costs before compensating eligible consumers, with valid claimants set to receive a pro-rata share of what remains after those court-approved deductions. The settlement agreement still requires approval from a federal judge before any payments can be distributed.
Part of a Broader Pattern of Regulatory Scrutiny
The federal settlement follows a string of state-level enforcement actions tied to the same 2022 glitch. New York Attorney General Letitia James secured a $725,000 settlement with Equifax in January 2025 after state investigators determined the coding error had misreported credit scores for more than 77,000 New York residents, according to the New York Attorney General. In earlier Pennsylvania fallout, Equifax agreed to pay $485,000 in penalties and costs in March 2024 to resolve state attorney general inquiries into the same 2022 error.
Separately, Equifax reached a $2.2 million class-action settlement in Georgia federal court in August 2026, resolving claims under the Fair Credit Reporting Act that it placed duplicate collection accounts on credit reports for nearly 37,000 consumers in 2022, according to The Independent. That case, resolved separately from the $100 million settlement, points to a pattern of operational errors at the company during the same timeframe.
A Company With a History of Major Failures
Equifax, founded in 1899 and headquartered in Atlanta, operates as one of the three largest nationwide consumer credit reporting agencies alongside Experian and TransUnion, collecting credit file data on more than 220 million U.S. consumers. The company's troubles extend well beyond the 2022 scoring glitch. In September 2017, Equifax disclosed that hackers had accessed its systems and obtained Social Security numbers, birth dates and home addresses for nearly half the country, a breach that led to a multi-agency global settlement with the Federal Trade Commission, the Consumer Financial Protection Bureau and all 50 states worth up to $700 million, according to the Federal Trade Commission.
Credit report errors are not unique to Equifax. A landmark FTC study found that roughly one in five U.S. consumers has an error on at least one credit report that could negatively affect their credit score or loan eligibility, per the Consumer Financial Protection Bureau. That statistic underscores why disputes and monitoring remain critical tools for consumers navigating a credit system dominated by just three bureaus.
Why the Timing Matters for Borrowers Now
The settlement lands at a moment of heightened financial strain for American households. U.S. household credit card debt has reached $1.26 trillion, with 90-day delinquency rates climbing to 12.8%, according to Hoodline's reporting on Federal Reserve Bank of New York data. In that climate, even small credit score distortions can carry outsized consequences for cash-strapped borrowers trying to refinance debt or secure new loans.
For now, the roughly four million people covered by the proposed class must wait for a federal judge to grant preliminary and final approval before any pro-rata payments go out. Equifax has continued to maintain that the vast majority of consumers experienced no credit decision impact from the glitch, even as the company agrees to resolve the litigation that grew out of it.
