Buying a home? Here’s what the Equifax breach could mean for you.

We should all be paying attention to the recent Equifax data breach, estimated to potentially impact the personal data of 143 million U.S. consumers. Not great odds considering that’s one third of the entire country. But, if you’re currently applying for a mortgage or buying a home, you need to stay extra alert. 

Back up. So, what happened?

On September 7, Equifax revealed that hackers gained access to company data that contained sensitive information including social security and driver’s license numbers. You go to Equifax’s cybersecurity page to see if your data may be included in the breach, but there’s really no definitive way to tell. Just assume your data was impacted and play it safe.

Why is this such a big deal?

While data breaches are nothing new in recent years (think Target and TJMaxx), this one is especially sensitive due to the nature of the data as well as the shear number of consumers impacted. As one of the country’s three credit reporting companies, Equifax holds the keys to A LOT of your personal data — enough to do major damage including stealing your identity or even purchasing a home in your name.

At the same time, in today’s online, cloud-based world, any organization could be at risk.

“I’m not surprised that anyone gets hacked these days. If the Pentagon and White House can be hacked, any of the three credit agencies could, too,” said personal finance expert and syndicated real estate columnist Ilyce Glink, publisher of ThinkGlink.com. 

What does this mean for homebuyers?

If you’re in the process of applying for a mortgage or buying a home, this credit breach couldn’t have come at a worse time. Housing columnist Ken Harney recently laid out a few scenarios that could impact your home purchase.

Hackers could create new accounts in your name that put you into debt and drain your FICO credit score. We know your credit score is at the center of your purchase–it determines what type of loan you qualify for and your interest rate. That’s a big deal considering most first-time homebuyers choose a 30-year loan. 

Fraud can ultimately impact your ability to qualify for a home loan. Furthermore, getting your credit file corrected can take time and cause you to lose out on your home contact.

What can you do?

• Check your credit report. The most important first step is to check your three credit reports free at annualcreditreport.com to determine if anyone has tampered with your accounts. It also provides you with a baseline credit report as you monitor for any changes.
• Review your monthly statements. Don’t rely on auto payments for your credit card or other bills. Review your statements and be on the lookout for anything out of the ordinary.
• Review your bank statements. Review your bank statements weekly. Set up mobile banking alerts so you know if any unplanned transaction takes place.
• Fraud alerts. Consider placing a fraud alert on your files. It warns creditors to take extra steps to verify your identity before issuing credit in your name. To set up, contact one of the three major credit reporting companies and they will send your request to the other two bureaus.
• Credit freeze. Although credit freezing isn’t typically recommended before a major purchase, experts including Terry W. Clemans, executive director of the National Consumer Reporting Association, now give this guidance. A credit freeze makes it harder for someone to open a new account in your name. Keep in mind that a credit freeze won’t prevent a thief from making charges to your existing accounts. You’ll have to contact each company to set it up and costs may vary.
• File your 2017 taxes ASAP. This is the year to file your taxes early — take action before any scammer can. Tax identity theft happens when someone uses your Social Security number to get a tax refund or a job.

Credit reporting companies

• Equifax: 1-800-525-6285 or www.equifax.com
• Experian: 1-888-397-3742 or www.experian.com
• TransUnion: 1-800-680-7289 or www.transunion.com