It has seemed like there’s been a new disaster every day for the past couple of weeks, but one that might have slipped through your radar is not a flood, hurricane, or earthquake. It’s the compromising of the personal information of around 143 million Americans.
This massive data breach was the result of a month long hack of Equifax, one of the Big Three credit rating agencies (CRAs). Unfortunately, many Americans aren’t educated on what CRAs are, let alone aware of the amount of their information these agencies have. For a detailed breakdown of the Big Three (Experian, TransUnion, and Equifax) a great resource is money.howstuffworks.com. In short, Experian, TransUnion, and Equifax maintain the largest databases of American consumer credit. The agencies have social security numbers (SSNs), addresses, driver’s license numbers, birth dates, credit card history, credit card numbers, loan histories, and more for most Americans. They get this information from creditors on a monthly basis. They use all of the data they get to compile a credit score and in turn send this number to creditors to tell them how much of a risk a potential customer is. The higher the score, the lower the risk, the better the credit. Having a high credit score tells lenders that you tend to be responsible with your money and will probably pay your loan back in a reasonable amount of time, and they will offer you more favorable terms on a loan. Landlords and potential employers can also find these scores and decide your trustworthiness based on the number they see.
Credit scores were largely hidden from consumers until the 1971 Fair Credit Reporting Act, which cemented the right of Americans to know their credit score for free and know why their credit was denied. Equifax and other credit reporting companies may try to ask you to pay for your credit score, but you should know that you have the legal right to your information, and there are many sites that will give you it for free. The site that I use in particular is Credit Karma which gives me a basic breakdown of my credit score. Americans can also request yearly reports of their credit from each CRA. Be careful with the sites that you use as well, as there are impostor sites which are actually phishing for your personal information. It’s a good habit to check your score every few months. Identity thieves are capable of creating credit cards and loans in other people’s names, ruining their credit by not paying the bills, and making it virtually impossible for the victim to get more loans, credit cards, jobs, apartments, and more. For more information on identity theft, visit money.howstuffworks.com/identity-theft.htm.
So what happened with Equifax? According to Equifax, the hackers had access to some of their records from mid-May to July of this year, records which included people’s names, Social Security numbers, birth dates, addresses, and some drivers license and credit card numbers. To see if your information was potentially accessed, visit www.equifaxsecurity2017.com/, click on “Potential Impact” and follow the steps (which include entering your last name and the last six digits of your SSN). Once the site has your information, it will let you know your status and if your information was compromised, and will allow you to sign up for Equifax’s credit monitoring for free. Until a couple days ago I would have urged you to not sign up for this credit monitoring as it would have made you waive certain rights with regards to your ability to sue Equifax for a breach in information. However, as of September 8th, Equifax has posted an update on the front page of the checking website saying that they “have made it clear that the arbitration clause and class action waiver included in the Equifax and TrustedID Premier terms of use does not apply to this cybersecurity incident” so users do not waive their rights to sue. Thus at this point I would say it is your own choice to trust their credit monitoring or not. If you find out that your information was stolen, please sign up for credit monitoring and try to set up an appointment with a banker or financial advisor, and report any suspicious activity in your name immediately to the Big Three.
Stay safe!