The recent hacking incident at Equifax, has created a lot of confusion and concern about what it means and what risks it has created for each of us. As I was looking into it for my own sake, I thought I’d pull together my notes here as well.
First, what is Equifax and what do they do? The lending business (e.g., mortgages, credit cards, auto loans etc) depend primarily on three companies to provide data to them to help assess the credit risk (i.e., the risk of not being repaid) when a person applies for a loan. Equifax, Transunion and Experian gather and compile data on individuals through a variety of sources.
That data includes names, addresses, SSN’s, borrowing history and many other bits of information gleaned over time. This under-regulated industry is a prime target for hackers looking to steal data that can be used for a variety of illicit transactions including some where hackers could potentially wreak havoc with your financial life. Data thieves could:
- Rack up charges on your credit cards.
- Apply for a loan or credit card using your identity.
- Steal money from your financial accounts.
- File a false tax return claiming a refund.
- Steal your medical information and then use it to, say, fraudulently fill prescriptions or submit medical expenses for insurance reimbursement.
One important first step is to see if your data may have been stolen during the Equifax hack. They have set up a site where you can input your information and learn your personal situation. Note this is per person (by name, SSN etc) so couples should do this individually. There was also a firestorm when Equifax initially caused people to waive their right to sue them if they used this feature – but they have since backtracked from that requirement.
If you have been affected (I was) then you should consider following through on the Credit Monitoring/Fraud Alert service Equifax provides (free for a year). And unless you are going to be seeking a loan in the near future I would also recommend Freezing your Credit Report at each of the three companies.
A credit freeze will prevent a new creditor from accessing a consumer’s credit report. This move prevents anyone from opening a new line of credit in the name of the consumer who enacted the freeze. To initiate a freeze, consumers must contact each credit firm and follow their procedures. Consumers may contact each of the three major credit firms at:
- Equifax: Call 800-349-9960 or visit its website.
- Experian: Call 888-397-3742 or visit its website.
- TransUnion: Call 888-909-8872 or visit its website.
I was able to do this easily online at the Equifax site but had to call in to the other two to complete the freeze.
You should also consider monitoring your credit report at Annual Credit report – you can do so once per year for free. I also read that you can get a free report once per year from each of the three credit reporting companies so effectively you could check once per quarter at no cost.
It’s a pain to have to deal with this but in today’s world it’s essential to take all steps to prevent the much bigger headache of identity theft.
Sources and more reading: