As many people may know, there was a massive security breach at Equifax recently. The reason there is such a buzz about it is because Equifax is one of the largest credit reporting companies, and it holds the personal and financial information of hundreds of millions of people. For Canadians, it was reported that approximately 8,000 people were impacted by these cyber hackers, and a whopping 143 million Americans were affected – meaning all of that private information is out there – in the hands of criminals. This has shed some new light on how our vulnerable we are when it comes to keeping our financial information secure, and that we need to do more to secure this information.
What do companies like Equifax do?
Although Equifax is one of the larger credit reporting companies in Canada, they also compete with TransUnion Canada. These non-government agencies gather personal credit histories and they compile it to form your credit report (and sometimes share the information with other companies such as Credit Karma). They look at credit and payment histories on each loan, mortgage and bill that’s had your name on it, such as: utilities, cell phones, cable TV, and of course, credit cards. All of this information, plus what your bank or lender has, becomes your credit report or credit score. Your credit score is a three-digit number (between 300 – 900) calculated from the information in your credit report. It shows the level of financial risk you represent to a lender or business (such as car dealerships or large stores who offer credit cards), and it’s used to assess if they will give you credit or lend you money – and what interest rate to charge.
People are naturally eager to learn their credit score, especially when applying for a loan or mortgage, so they log onto various websites which advertise that you can find out your “credit file disclosure”, or credit score, for free. In fact, Canadian laws dictate that everyone should have free access to their credit reports, but the “free” services aren’t very easy to locate online, and involve waiting up to two weeks for a mailed report. Not surprisingly, most people end up registering with them and paying a fee to conveniently access their score, as well as buy additional services such as credit score alerts. That process is part of the reason why all that private financial information ended up on their servers. Anyone logging in to a website like that would assume it was very strictly encrypted and protected, but that wasn’t the case with Equifax.
Now that the leaks have been discovered, Equifax is encouraging Canadians who registered with them at any point to call them at 1-866-828-5961 (English service) or 1-877-323-2598 (French service) to find who was affected by the security breach, and to set up a credit monitoring service that they offer free for one year for anyone impacted. However, the Canadian government is now discussing the seriousness of this issue and how to ensure these companies protect citizens from future cyber attacks.
How do these types of security breaches affect me?
If you were one of the 8,000 Canadians affected by this, hopefully you have contacted Equifax, your lender/bank, and secured all of your information. However, even if you are not impacted, it is still a great lesson for us all to be much more attentive and cautious about what happens to our financial data. Cyber attacks are increasingly common, and it’s not always easy to keep that data from the wrong hands. If you are concerned, you can set up a fraud alert on your credit reports, which notifies anyone who wants to access it that you suspect you may be a fraud victim. Then, if someone tries to open a credit account in your name, or make changes to an existing account, additional steps are needed to verify the request. It’s not 100% secure, but it’s a good start. Always review your credit card bills and regularly check bank accounts for unusual or unauthorized transactions. Tell your lender and credit card company immediately if you think you have been a victim of identity theft, and report any signs of theft or crime to local police. It’s important that you know where you are at with your current credit rating, so that when the time comes to apply for a loan, mortgage, or credit card, you won’t have any surprises. If you’d like to learn more about how to improve your credit score, or anything related to getting a mortgage or loan, don’t hesitate to give me a call at 705-315-0516. I am an experienced Mortgage Broker who is here to answer your questions and help you on your way to reaching your financial goals.