Equifax teaches hard lesson on need to monitor credit scores
Consumers were shocked by recent news of a security breach at Equifax that could affect 143 million people in the United States and as many as 100,000 Canadians who may have had their personal information and credit card details compromised.
The news should be a wake-up call. If you have a bank account or credit card, or if you’ve ever borrowed money, your personal data is already out there and potentially vulnerable to hacks, fraud and identity theft. If you’ve never been hacked, the best defence is to assume you already have been.
“We live in a world where it’s no longer optional for us to be tracking our credit score and taking steps to protect our credit and financial health,” says David Feller, founder and chief executive officer at Mogo Finance Technology Inc. “One of the great breakthroughs of the fintech revolution is to empower customers by providing them with solutions that help them manage their financial health in realtime through access to the right digital tools. We allow customers to monitor their Equifax Canada credit scores on a monthly basis, through our mobile app from anywhere, and that transparency allows them to take action and investigate further if they see an unexpected drop in their credit score.”
The breach affects far more consumers than those who have signed up for Equifax services. The bureau collects information on anybody with access to credit. It receives personal information from banks and other lenders who rely on this information to decide whether or not to lend money or extend credit. If you open a new cellular phone account or apply for a mortgage, your data will automatically become part of a credit bureau database.
Equifax Canada says that the Canadians most likely to be affected are those who had credit checks conducted in the United States. That group might include Canadians applying for a job in the United States or looking to buy property there. However, the breach highlights how critical it is for every Canadian to track and monitor their credit score, and in particular their Equifax Canada score, given that the parent company suffered the breach.
“If you think you might be one of the Canadians affected, I would call in a fraud alert to Equifax Canada and Trans-Union, the other major credit bureau in Canada, as a pre-emptive strike,” says Chantel Chapman, Mogo’s financial fitness coach. “If you’re only monitoring TransUnion, you should definitely consider adding Equifax.”
Mogo is currently the only company in Canada offering customers free monthly monitoring of their Equifax credit score through a dedicated Android or iOS mobile app.
“We want you to monitor your credit score and understand how it works, so that you understand the sort of changes that may mean your security has been breached,” says Chapman. “In most cases, a drop in your credit score is the result of some action on your part. But if you know that your credit cards aren’t maxed out, you haven’t missed any recent payments and your lines of credit are under 70 per cent of maximum, and you still see your credit score drop by 50 to 100 points in one month— that’s a strong indication of potential fraud.”
She notes that even a large number of legitimate credit checks by third parties can move a credit score downward, but not significantly.
“However, the best defence against credit fraud is to assume that the worst could already have happened,” says Chapman. “Free Equifax monitoring through the Mogo app is a great way to begin enhancing your ability to monitor and protect your financial health. Now, more than ever, consumers need to take control of their credit scores.” Free credit score is provided by Equifax and is only available to MogoAccount holders that have passed identity verification. The Equifax credit score is based on Equifax’s proprietary model and may not be the same score used by third parties to assess your creditworthiness. The provision of this score to you is intended for your own educational use. Third parties will take into consideration other information in addition to a credit score when evaluating your creditworthiness.