# Equifax Settles $100 Million Credit Score Error Case
Equifax reached a $100 million settlement to resolve allegations that a software glitch sent wrong credit scores to lenders, affecting roughly 4 million consumers. The error occurred when Equifax miscoded a metric used to calculate creditworthiness, potentially lowering scores for borrowers and costing them money on loans and credit cards.
The settlement requires Equifax to pay out cash to eligible consumers and fund credit monitoring services. This resolves a class action lawsuit claiming the credit reporting giant failed to catch and fix the coding problem quickly enough.
## Who Is Eligible
You may qualify for payment if you were a consumer whose credit score was miscalculated by Equifax between 2015 and 2019. The exact window and specific criteria will be detailed when the settlement receives final court approval. Equifax must notify affected consumers directly about eligibility and the claims process.
The settlement amount of $100 million will be divided among claimants. The total payout per person depends on how many people file valid claims. If 1 million people claim, payouts average $100. If 4 million qualify and most file, individual payments drop significantly lower.
## What The Error Actually Cost You
A lower credit score translated to real money losses. Lenders use credit scores to set interest rates on mortgages, auto loans, credit cards, and personal loans. A 50-point score drop could raise your mortgage rate by 0.5 percent, costing thousands over 30 years. Credit card companies use the same scores to determine your APR and credit limits.
The inaccuracy was particularly damaging because consumers often didn't know their scores had been artificially suppressed. They applied for credit and faced higher rates than their actual creditworthiness warranted. Some were rejected entirely for credit they should have qualified for.
Equifax is one of three major credit reporting bureaus. It collects payment history, debt levels, credit inquiries, and other financial data on roughly 800 million people globally. Lenders, landlords, employers, and insurers rely on Equifax credit reports to make decisions about lending, housing, hiring, and coverage.
## What Happens Next
The settlement still requires final court approval, typically a formality for cases of this size. Once approved, Equifax will establish a claims website where consumers can submit their information to verify eligibility. The process usually takes several months from approval to payment distribution.
You do not need to join a lawsuit or hire an attorney to claim your share. The settlement is automatic for those who meet the eligibility criteria. However, you must file a claim to receive payment. Equifax will publicize the claims process heavily, but checking the settlement website yourself ensures you don't miss deadlines.
This settlement adds to Equifax's mounting legal troubles. The company paid a $700 million settlement in 2019 for a massive 2017 data breach that exposed personal information on 147 million people. That case cost Equifax in payouts, credit monitoring, and reputation damage.
The credit score error case demonstrates the consequences when major financial institutions make coding mistakes. Equifax handles data on millions of people and controls decisions that shape loan terms and interest rates. Settlements like this one incentivize these companies to test systems thoroughly and catch errors before they harm consumers.