Everything You Need to Know About the Equifax Breach
Even in our fast-moving news cycle, some stories leave an impact simply because of how many people were affected.
The Equifax security hack became one of the hottest news stories of 2017 after the company announced the breach in early September. There’s good reason for that: the personal data of more than 145 million Americans—nearly half the country’s entire population—was compromised in the attack. If you’re reading this, then there’s a very good chance your information was compromised, and the consequences of that may follow you for years to come.
So…what does that mean? Is your credit ruined? Are criminals opening credit cards and taking out mortgages in your name as we speak? The short answer is…not necessarily.
Let’s take a minute to sift through all the fear mongering and the fake news and answer a few key questions: what happened, what does it mean, and what do you have to do now in response?
The short answer: millions of Americans’ confidential information was exposed to hackers who managed to break into Equifax’s system.
The long answer: Equifax is one of the three largest credit reporting bureaus in the United States, alongside Experian and TransUnion. These bureaus are publicly-traded corporations that keep tabs on consumers’ use of credit, and rate consumers’ credit worthiness based on the FICO® credit rating model. All three market credit reports and fraud-prevention services to consumers. They also sell consumer information to businesses for various purposes including research, marketing, and debt collection.
The breach first occurred sometime in mid-May 2017. By exploiting a flaw hidden in a tool designed to help build web applications, hackers managed to gain access to Equifax’s systems. The breach continued undetected until the end of July, when Equifax identified the hack and patched the security vulnerability.
Unfortunately, 145.5 million Americans’ data had already been compromised by that point. This information can include your:
- Social Security Number
- Birth Date
- Current & Former Addresses
- Driver’s License Number
Equifax did not announce the breach until September 7, which the company asserted was to ensure that the breach had been fully dealt with.
What Does the Equifax Breach Mean for Consumers?
The short answer: Nothing good.
The long answer: If your identity was compromised in the breach—and don’t forget, more than half of all American adults fall into that category—it’s all a matter of chance. It’s entirely possible that nothing will ever happen, even if your information was stolen. However, the ramifications could be severe if a criminal does use your information.
Considering the sensitive nature of the information involved, criminals could create fake accounts, open new lines of credit like a credit card, or even apply for a loan…all in your name. They might even use your information to commit tax fraud and steal your tax return out from under your feet. In each case, you could be stuck with the bill from these fraudsters, and your credit score might be permanently damaged.
As if that weren’t bad enough, the harm to your credit rating could have additional, unanticipated side effects. Damage from the breach may potentially:
- Hurt Your Chances of Getting a Job: Some employers choose to pull job candidates’ credit reports. Bad credit—even if it’s not your fault—could lead an interviewer to pass you over for another candidate.
- Raise Your Insurance Payment: If you own a car, your credit rating can impact the monthly amount you pay for your insurance premium.
- Cost You More in Taxes: If fraudsters use your SSN to create a fake identity in another state, but fail to pay state taxes for that identity, you could be stuck with the bill.
- Make You Ineligible for Financial Aid: If you’re a college student, or are thinking about going to college, a bad credit score could limit your options for financial aid.
What Do I Need to Do to Protect Myself?
There is no “short & long” version here. Protecting your personal security is going to take some time and resources, but given the nature of the consequences, it’s something you have to do.
Here are the steps you can take to ensure that you avoid—or at least minimize—the damage resulting from this massive hack:
#1. Check to See If You’re Affected
Equifax set up a website to help consumers identify whether their data was compromised. Remember that this doesn’t necessarily mean your information has been used by a criminal, but only that you might be affected.
#2. Enroll in a Credit Monitoring Program
Equifax is providing free credit monitoring to all US consumers in response to the hack. This will monitor your credit reports from all three reporting bureaus for suspicious activity, as well as routinely scan the internet for your sensitive personal information.
#3. Freeze Your Credit
By freezing your credit, you make it impossible for anyone to take out a line of credit in your name until. Of course, this means you’re excluded from using your credit as well until you give the order to unfreeze it.
Freezing your credit is not free, and can be a bit time consuming, so you may want to skip this option for now if you plan to apply for a new credit card or loan sometime soon.
#4. Check Your Credit Regularly
You’re legally entitled to one free credit report every year from each of the three major credit reporting bureaus. Consider requesting each one at a different point in the year to improve the odds that you will catch any fraudulent activity early.
#5. File Your Taxes Early
You can minimize the odds that a scammer will file taxes in your name by simply filing first. You should complete and submit your taxes as soon as you have the necessary documentation, or else a scammer may try to use your information to file a false return.
If there is a silver lining to this massive incident, it is that the information stolen shouldn’t impact any of your existing accounts. While a stolen Social Security number is a disaster, it won’t give fraudsters the access to your credit cards or bank account.