The Equifax Hack: What Happened and What It Means to Consumers

It is no secret that large companies collect more information than ever before. While some of the data stores that result have little impact on the lives of the average person, others can be far more dangerous.

The recent Equifax data breach illustrates a situation of the second kind. With a majority of Americans who have credit of any kind being affected, understanding the issues has become a common and reasonable concern.

What Equifax Does and Why

As one of the country’s three major credit reporting agencies, Equifax collects data sent to it by lenders. From local and nationwide banks to credit card issuers, businesses that extend credit to consumers report on how the latter fare with regard to keeping up with their obligations.

Over time, each person who obtains credit of just about any kind in the United States ends up with a fairly comprehensive record of this type. From payments made on time over the years to credit inquiries and new accounts, the resulting information paints a detailed picture of each individual’s performance as a borrower.

In order to associate all this important information accurately with actual human beings, Equifax and other credit reporting agencies also collect even more personal data. Prime among these is the Social Security number, a uniquely identifying string that was nonetheless never meant for this purpose.

The Information That Was Leaked

For most of the more than one hundred and forty million Americans who were affected by the breach, this crucial piece of information was part of the loss. Armed with that data and other details like date of birth and current and past addresses, hackers can have a go at obtaining credit in just about any victim’s name.

That can certainly be bad news. Sorting out identify theft crimes like this can take years and many thousands of dollars’ worth of lost time and productivity.

While it might seem as if lenders should be held responsible for making sure that they are dealing with the person who is ostensibly applying for credit, the norms are such that this remains more or less unrealistic. As a result, many people today are now looking into options that might help safeguard them from such problems, such as credit freezes and fraud alerts.