A Look at Credit Bureaus

What is a Credit Bureau and what is the impact on your privacy?

Unless you spent 2018 asleep you are aware of a credit bureau called Equifax. Back last year, they went from admitting to a breach where 209,000 consumers credit card details were taken, to holding their hands up to a larger acceptance that they really meant, more like 2.4 million to finally sheepishly admitting that actually 143 million consumers were affected.

From social security numbers to addresses, driver’s license numbers, names, birth dates, as well as credit card numbers, credit histories were swooped up and possibly sold on.

We will never know how many, that’s the beauty of stolen data, it never gets fully recovered.

How did all this private data become so vulnerable?

Equifax alongside Experian and TransUnion are the three major credit bureaus that compile, report and deduce consumer credit information. These companies are regulated by the Fair Credit Reporting Act (FCRA) a federal law that defines how credit bureaus are supposed to work. Basically, this means that you have the right to dispute a credit report which will be investigated and corrected if necessary.

The right to order a credit report is also enforced by the Fair and Accurate Credit Transactions Act, 2003 and you are entitled to 3 free credit reports a year, one from each agency.

Types of Information collected

Credit bureaus collects Information about credit accounts: your repayment history, the amount of credit you are allowed, the amount of credit you use, unresolved debt, and information that is of public record like tax liens, bankruptcy, foreclosures and repossessions.

They also collect non-credit related information, like that stolen in the Equifax hack, which whilst not being used to calculate a credit score is used by businesses to verify your identity. This data is collected from open courts, banks and other businesses and they make the information available to people like employers, insurance firms, landlords and debt collectors.

The problem lies with the manipulation or theft of that data. This is shown by an example in Oregon,2013, where a woman won an $18 million lawsuit against Equifax, for failure to correct a credit report error she had disputed 13 times over.

Deliberate manipulation or theft is fraud. Someone may have intentionally gained access to your personal information and obtained credit in your name.

Credit Bureaus by nature are centralizing a lot of sensitive and important info, ipso facto, creating a huge target for hackers.

The best thing we can do on a cyber scale is to is make them almost impenetrable.

What can you do on a personal level?

Place a security freeze on your credit files at Equifax, Experian, and TransUnion) — that’s three separate phone calls. This is provided at little to no charge. This immediately stops new creditors from seeing your reports and will thereby stop fraudulent new accounts as creditors won’t be able to access your report.

This will seriously impact on your life, but will stop potential fraud as all access to your credit file will be denied. On the plus side, security freezes do not impact your credit score or existing relationship with creditors.

To find out more about the Credit Bureaus and how they affect our privacy, Check out the Goodbye Privacy podcast!