Data breach won’t automatically lower your credit score

Millions of Americans have had their private information compromised this 12 months in numerous knowledge breaches.

One VERIFY reader advised us a member of the family’s credit score dropped after they had been notified that their information was compromised in an information breach. The reader questioned if there’s a connection. 

“If a company has a data breach and I’m on the list of possibly compromised customers, will my credit score drop just based on that?” they requested. 

Does having your knowledge compromised in a breach automatically lower your credit score?

No, having your knowledge compromised in a breach doesn’t automatically lower your credit score. 

If your information is compromised in an information breach, that doesn’t imply your credit score will automatically take a success, specialists advised VERIFY. 

“A data breach is not a guarantee that your credit score will be affected,” NerdWallet knowledgeable Sara Rathner stated. “What it means is that your information has potentially fallen into the wrong hands, but that might be as far as it goes if your information doesn’t end up getting used by a scammer.”

More from VERIFY: Yes, the Equifax knowledge breach settlement electronic mail and web site are actual

A credit score is a quantity from 300 to 850 that estimates how seemingly you’re to repay borrowed cash and pay payments. Scores of 690 or increased are usually thought of good credit. 

FICO, a credit scoring firm, says it makes use of your fee historical past, the quantity owed, the size of your credit historical past, current credit functions and the kinds of credit you need to calculate your score. 

Another credit scoring firm referred to as VantageScore seems to be at your fee historical past, depth of credit, credit utilization, balances, current credit and out there credit to calculate your score. 

Some of those components carry extra weight than others. But the businesses don’t issue whether or not you’ve been a sufferer of an information breach into your credit score. 

A spokesperson for FICO advised VERIFY that its score “is only assessing credit risk, not fraud risk.”

However, a big drop in your credit score following an information breach may very well be a sign {that a} scammer or hacker used your title to open a brand new line of credit. 

If you suppose you’ve fallen sufferer to id theft, experts recommend that you just request a credit freeze with the three credit bureaus – Experian, TransUnion, and Equifax. 

The Federal Trade Commission (FTC) says a credit freeze ensures that somebody won’t have the ability to open a brand new credit account in your title whereas the freeze is in place. A credit freeze is free and lasts till you take away it. 

You also can place a fraud alert on your credit report. This will make it tougher for somebody to open a brand new credit account in your title, in accordance with the FTC.

A fraud alert is free and lasts one 12 months except you renew it for longer. You can place a fraud alert on your credit report by contacting any one of many three credit bureaus. 

Rathner additionally recommends keeping track of your credit stories, which you’ll be able to entry weekly at no cost on-line without hurting your credit score, and reporting any suspicious exercise to the credit bureaus. You may be eligible at no cost credit monitoring because of the info breach, she added. 

Anyone who’s a sufferer of an information breach also needs to control their financial institution and credit card statements for fraudulent withdrawals or fees, and report them to their financial institution instantly, Rathner stated.

For extra tricks to shield your private information, click on right here.