Credit breaches in the news
The recent revelation that credit agency Equifax was hacked raises fears that almost anyone could become a victim of identity theft. Below are Mark’s responses to clients’ questions about the best ways to protect themselves.
How serious is the treat of identity theft? Having processed over 10,000 mortgage loans, I have encountered very few clients who reported an event of identity theft. But for those who did, it created tremendous difficulties that affected them for months and even years after the event.
The Equifax hack seems to be more dangerous than previous breaches. Should I put a freeze on my credit? This is the most common question I’ve heard in the last few weeks. There may not be a ‘one size fits all’ answer, but I will share what I have done. My mortgage broker’s license depends on my credit score, so I am more exposed than the normal person, since my profession and business depend on my credit. As of this time, I have not placed a freeze on my credit. My reasoning is that since the data breach affected around 140 million people, I’m just one in a huge cloud. I may re-evaluate this as other information comes to light.
A credit freeze is a sure-fire way not to be a victim of identity theft, isn’t it? It certainly protects you from someone opening a credit account using your name and social security number. However, it would not protect you from a false claim with the IRS where someone files a tax return in your name in order to receive a ‘tax refund.’
Are there other disadvantages to a credit freeze? It can create significant delays in obtaining credit because you have to ‘un-freeze’ all three credit bureaus so your creditor can access your information. Although this should be done instantly in the age of computers, our experience is that it can take 12-24 hours to create the ‘un-freeze,’ which provides only 24-hour access to your creditor. So we find that by the time it is ‘un-frozen’ it has already been ‘re-frozen’ because 24 hours has elapsed. Also, when you apply for mortgage financing, your credit needs to be accessed several times by several of the parties involved—the lender, your insurance company, etc. It can be inconvenient to keep up with all the times needed to freeze and un-freeze.
Are there other protective measures I can take? Credit-monitoring services may offer the broadest protections. Many customers who use these services call me immediately when they receive an alert via their mobile phone app regarding an inquiry during their mortgage process. So it seems to be very effective in keeping you informed in real time about any credit activity that involves your name and social security number.
I welcome your questions and comments and am happy to help you with any mortgage needs. I can be reached at (864) 235-9596 or via email at Mark@TheGreatestRates.com.
Or Text Me Now! 864-430-4856.
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