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Credit

Equifax just changed the rest of your life

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Adding freezes to your credit reports is an appropriate response to the massive Equifax database breach that exposed the private information of 143 million Americans.

Don’t make the mistake of thinking those freezes will keep you safe, however.

Credit freezes lock down your credit reports in a way that should prevent “new account fraud,” or bogus accounts being opened in your name. But there are so many other ways the bad guys can use the information they stole, which included Social Security numbers, birthdates, addresses and some driver’s license numbers. In my latest for the Associated Press, find out the other ways the Equifax breach will affect your life for years to come.

Wednesday’s need-to-know money news

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Today’s top story: How to boostrap your credit for free or cheap. Also in the news: 3 ways to get your business up and selling on Amazon, three things to do for the best online banking, and how to save at the start of your career.

How to Bootstrap Your Credit for Free — or Cheap
Slow and steady.

3 Ways to Get Your Business Up and Selling on Amazon
Start making money.

For the Best Online Banking, Do These 3 Things
Easy steps.

How to save at the start of your career
The earlier the better.

Tuesday’s need-to-know money news

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Today’s top story: 3 ways to scrub a collections stain off a credit report. Also in the news: Why you probably need title insurance, socially responsible investing, and the Equifax hack just got worse.

3 Ways to Scrub a Collections Stain Off a Credit Report
Do your homework.

Title Insurance: What It Is and Why You (Probably) Need It
Title insurance protects the insured from a financial loss related to the ownership of a property.

Socially Responsible Investing Takes Clearing a Few Hurdles
Align your investments with your values.

Your Credit Cards May Also Have Been Compromised in the Equifax Hack
It keeps getting worse.

Outrage after outrage

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Yesterday Equifax broke the news hackers gained access to the Social Security numbers and other sensitive personal information for 143 million Americans (a group that apparently includes me, my husband, our daughter and probably you).

Because that wasn’t enough, today the outrages just continued:

  • The breach was discovered at the end of July. What was Equifax doing in the meantime? Well, its executives sold about $2 million worth of company shares,  The Washington Post reports.
  • The same day the breach was announced, Congress scheduled a hearing on a bill to shield the bureaus from full accountability from their actions.
  • Equifax offered free credit monitoring for a year, but didn’t make clear whether its usual binding arbitration language applied. So were people waiving their right to sue over the breach? Equifax wouldn’t say, until the New York Attorney General demanded and got an answer: the binding arbitration clause applies to the monitoring product, not the breach. Just in case, after signing up I sent this letter using Equifax’s opt out clause to (hopefully) preserve our right to sue.
  • Credit monitoring doesn’t prevent anything; it just notifies you after you’ve been victimized. Equifax is also offering free credit freezes, which prevent others from opening accounts in your name. Well, it was supposed to be free; some journalists reported they were charged $3.
  • Experian and TransUnion aren’t offering free anything. To shut down your credit, you need freezes at all three bureaus. The others are charging $3 to $10 each, plus additional fees if you need to temporarily lift the freeze to apply for credit, a job, insurance, cell phone service, utilities, an apartment, etc. Oh, and freezes won’t help with other types of crime, such as medical and criminal ID theft or blackmail. (The hack is a potential national security threat, according to experts quoted by the New York Times.)
  • Oh, and when victims try to enroll in credit monitoring, Equifax tells them to come back in a few days. Because, apparently, they’re kind of busy.
  • In fact, all three bureaus’ Web sites were having trouble under the deluge of requests. Sites were freezing and offering error messages; people were getting busy signals or being kicked off calls.

There was no way to make this breach better, but clearly there were plenty of ways to make it worse.

 

Q&A: How long will a tax lien linger on a credit report?

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Dear Liz: You wrote an article about how the credit bureaus are removing civil judgments and tax liens from people’s credit reports. I’ve been denied credit due to a few tax liens. Creditors won’t negotiate, even though the IRS has already deemed me unable to pay due to my disability. (I’m receiving Social Security disability income.) My question now is, how can I be sure it is being removed? Do I need to call the bureaus? Order another credit report?

Answer: Your unpaid tax liens may disappear, or they may not.

Starting in July, Equifax, Experian and TransUnion began removing liens and judgments when those records lack enough personally identifying information to ensure that the negative marks wind up on the right people’s reports. Another new requirement is that the records be properly updated, so that accounts that have been paid or resolved aren’t still showing as unpaid.

The error rate for these records was high, leading to many complaints, disputes and lawsuits. The bureaus expect to purge virtually all civil judgments but only about half of the tax liens.

If your liens aren’t purged and you can’t pay them, you may have to wait a while for them to fall off your credit reports. Paid liens are subject to the seven-year limit on how long most negative items can appear on credit reports. Unpaid liens can technically remain indefinitely, although the bureaus typically remove them after 10 years.

Q&A: An Internet search isn’t the best way to find a credit counselor

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Dear Liz: You’ve mentioned finding a nonprofit credit counselor and I was wondering the best way to go about that without feeling like I’ve been scammed. I’m wise enough (in my later years) to know that “nonprofit” does not mean free or even cheap services, so I didn’t want to just search for “nonprofit credit counseling, McKinney Texas.” Suggestions? Or should I do just that?

Answer: You can find a nonprofit credit counseling organization in your area using the National Foundation for Credit Counseling site at www.nfcc.org. NFCC is the oldest and largest credit counseling organization. Member organizations provide a variety of free and low-cost services. Those include financial education, credit report reviews and counseling about credit and debt, bankruptcy, foreclosure prevention, housing and reverse mortgages. If you’re struggling with credit card debt, these agencies provide debt management plans that can allow you to pay off your accounts at lower interest rates.

If you think you may need a debt management plan, you may also want to consult with a bankruptcy attorney. You can get referrals from the National Assn. of Consumer Bankruptcy Attorneys at www.nacba.org. Credit counselors — and their clients — are sometimes too optimistic about people’s ability to pay off debt, so you should understand the advantages and disadvantages of bankruptcy before you commit.