I’m the last person to call for more government regulation – but if financial institutions require FINRA, and health care systems are required to abide by HIPAA, it’s time credit bureaus are regulated. Breached personal financial data and health care records can be incredibly devastating to the victim, but I value my personal credit history, which I have worked hard to maintain, as just as valuable.
Beyond the obvious reasons for good and accurate credit maintenance, like financing a car or home, and obtaining a credit card, many employers check credit on prospective employees, and insurance companies often vary rates based on creditworthiness. Can you imagine being turned down for a high-paying government job because your background check came back as questionable due to poorly managed credit bureaus reporting an incorrectly low credit score?
Weeks after Equifax acknowledged that hackers had breached the company’s system (which was months after it occurred), the company’s interim chief executive, Paulino do Rego Barros Jr., apologized for the company’s messy response. The breach meant that potentially 145 million names, Social Security numbers, birth dates, addresses, and driver’s license numbers had been compromised, and where now in the hands of cybercriminals.
I recently had to unfreeze my credit for a company purchase that I guaranteed. I was astonished to find that although I regularly pull and check my credit report, and my address has been correct in the past, for some unexplained reason Equifax had an address I lived at 13 years ago as my current address now. That probably has reduced the clutter in my mailbox for ‘preapproved’ credit card applications. The scary thing is whomever lives at my old address has been receiving them (with my name on them) for some time now – Which is a whole different problem. I had selected an option on Equifax’s Web site many years ago to not receive credit card solicitations, but apparently that is only good for a limited time, and must be renewed periodically.
So, the reality with all three credit bureaus is that they make money on yours and my personal information. They normally sell that information for a profit. NO ONE other than the Federal Trade Commission keeps a watchful eye on them. So, as with most monopolies and oligopolies, they can be sloppy and inefficient.
Well, what do you do now? Equifax does have a Web site for you to determine if you are one of the 145 million Americans that were affected. It’s fairly well established however that the tool on the site is inconsistent, and the consensus among many now, is that Equifax really doesn’t know who might be affected. So, you are better off freezing your credit at this point.
You can — and you should — set up a freeze on the websites of all three credit bureaus. There may be some minimal fees associated with doing so. You’ll receive a PIN that you’ll need when you want to thaw your credit file in the future when you apply for credit, such as a car loan or a credit card. In addition, a small fee may be charged to occasionally unthaw your records when you apply for loans. To minimize the fees, which are usually about three dollars for each bureau, find out which bureau the lender uses to check your credit, and only unthaw that bureau.
Why is it important to freeze your credit? When a Cybercriminal attempts to access credit records with your Social Security number and address to apply for credit in your name, the lender will try to obtain your credit report initially. If they can’t retrieve the report because of the freeze, then no new account can be created for the thief.
Also consider freezing your credit at all three major credit bureaus. Cybercriminals might take your stolen information and apply for credit at a lender or other company that only checks Experian or TransUnion for credit information. If you’re married, both you and your spouse should freeze your credit files, because the companies maintain files for every adult for which they keep credit history.