Thursday, September 14, 2017

Equifax data breach - credit freezes - getting a mortgage

Below is a great article on Equifax’s data breach by Mortgage News Daily.  This is a very hot topic right now, especially in the lending industry, and Equifax won’t give you a definitive answer if your information was or wasn’t compromised.  Because of this, many are already taking steps to help secure their credit information by doing one of the following:

1.       Freezing access to credit reports (here is a great article about credit freezes and how to do so:  https://www.usatoday.com/story/money/2017/09/13/how-freeze-your-credit-protect-your-identity/657304001/)
2.       Ordering a free credit report from www.annualcreditreport.com  

Right now, there is so much traffic to these sites that many are unable to freeze or obtain a credit reports.  I just tried myself with no luck.  The path of least resistance, and more importantly most secure, is using the phone or snail mail to reach out to these credit bureaus/reporting agencies. 

The easiest way to check if your credit information has been compromised and under attack now is to get a free credit report by annualcreditreport.com.  If you haven’t used this site in the last year, you will be able to get a free copy from each credit bureau.  It’s most important to get a copy from Equifax since it was hacked but you should also check the other two bureaus since confidential information may have been compromised and used to gain access to the other two credit systems as well.

This ties into credit freezes.  It’s not enough just to freeze Equifax, to properly secure access to your credit reports, you need to freeze all three bureaus (that includes Transunion and Experian).  The issue here is that only Equifax has waived the fee to freeze credit, so Transunion and Experian will still charge a fee to do so.  Freezing credit is the most secure step to take, but it also can be annoying to unfreeze and refreeze when needed.  These bureaus are already poor at communicating, providing adequate customer service, and are notorious for errors.  Needless to say, there will likely be headaches involved with freezing and unfreezing your credit BUT… it’s the best step to avoid the long-lasting headache when your personal information has been used towards identity theft. 

The best long term solution is to freeze your credit profile with all three agencies OR signup for credit monitoring/identity theft services such as LifeLock.  This is something I am going to consider much more heavily to make sure my identity doesn’t get compromised in years to come. 

It’s important to note that a credit freeze does not stop a homebuyer from applying for a mortgage.  However, the homebuyer will need to lift the freeze for the lender to pull a credit report.  After doing so, the homebuyer can put his/her credit back on freeze.  One thing to keep in mind is that lenders have the right to pull credit again before funding the loan (doesn’t happen often).  Therefore, it may be wise for a homebuyer to unfreeze the credit until the loan has closed to avoid potential delays.  The other option is to unfreeze the credit again a week before closing, which will likely come at an additional cost.  After the loan has closed, the homebuyer can refreeze access to credit. 

For the latest updates from Equifax regarding this incident, you can visit their dedicated website about the cybersecurity hack here:  https://www.equifaxsecurity2017.com/Equifax has updated some policies which are identified in their link based on consumer feedback and backlash.  Therefore, some statements in the below Mortgage News Daily’s article are outdated such as “waiving the right to sue” and “continuing subscription” regarding the TrustedID website.   

The above information is my own personal opinion.  I highly suggest you do your own research and what you feel is in your best interest.  The below article is very informative and I highly suggest you read the whole thing. 

Mortgage News Daily – Equifax: Turning a Crisis into an Opportunity
http://www.mortgagenewsdaily.com/09092017_credit_reports_scores.asp

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