Experian Security Flaw Exposed PINs Needed to Unfreeze Credit Profiles

With identity theft and consumer fraud constantly on the rise, every potential security breach is important for consumers to know about. All consumers, even those without credit cards, should constantly be prepared, and on the lookout for signs that they may be the targets of fraudulent activity. Recently, it was discovered that one credit reporting agency, Experian, had an overlooked security flaw that allowed criminals to access a consumer's PIN. According to Liz Weston's article, this failure of security has since been addressed, but for several hours this week, pretty much every person's credit profile was at risk.

If someone is the target of a cybercriminal and discovers that fraudulent activity has happened on their account, the first step they tend to take is freezing their credit so that more fraud can't happen in the time it takes to investigate the original fraud. This isn't an ideal solution, as some people who live paycheck to paycheck rely on their credit to survive, but overall, it's the best option currently available, as many consumers can go a few weeks without borrowing money from a lender or charging expenses to a credit card. In order to undo the freeze, to make the user's account accessible once the fraud issues have been cleared up, a user usually has to input a PIN code online and answer a few security questions.

This type of system, while convenient to the consumer who needs to unfreeze their credit as quickly and easily as possible, has its downsides too. The main issue with this system was revealed this week. In order to get into someone's account without their PIN code, a criminal would need to know certain financial information like name, Social Security number, date of birth, and street address (all of which can be purchased illegally through the dark web from criminals who had previously hacked companies like Equifax). Additionally, the hacker would usually have to also answer security questions that only the real user would know the answer to (name of a favorite teacher, favorite foods, etc). However, this Thursday, it was discovered that if a hacker (or any user, really) answered "none of the above" to the security questions (even if the correct answer was available to choose), the system would allow the unapproved user access, which could enable them to unlock a frozen credit profile.

Some users tested out the security flaw themselves to see if they could trick the system into giving up their PIN, and found that they succeeded quite easily. After broad public backlash, Experian announced this week that they were confident of the security of everyone's credit information, but is still working on making things even more secure to improve customer satisfaction. Late in the afternoon, users began to find that the security flaw had stopped working, a positive sign for worried consumers. However, as these issues keep arising and credit companies don't fix the security issues until after the fact, many consumers believe that the credit agencies don't have their customers' best interests at heart. However, there isn't much a consumer can do right now except be vigilant and keep insisting that credit agencies continue improving security.

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Outdated or Incorrect Information Could be Holding Back Your Credit Score

Credit is probably the most important aspect of your financial identity. Your credit score can tell lenders how trustworthy of a borrower you are, or how likely it is that they will make their money back. A good credit score can mean the difference between a low interest rate and an exorbitantly high one, and a bad enough score could even get your application for a loan dismissed entirely. There are a few major aspects that determine your score: length of credit history, total amount of debt, and the regularity of debt repayment tend to be the biggest factors. By adjusting those variables, you can raise or lower your score over time. According to an L.A. Times article by David Lazarus, changes to the largest credit agencies' calculation may have recently upped your score, but that doesn't necessarily mean it will stay that way in the near future.

Lazarus writes that some of the larger agencies recently went through their data, and removed a lot of incorrect or outdated information, which presumably improved the scores of those borrowers being held back by such data. But, even though some of the information has been expunged, that doesn't mean they got all of it. In fact, it doesn't even mean they got most of it. The three biggest credit agencies are Experian, TransUnion, and Equifax, and just like all corporations, these companies exist to make money.

Credit agencies serve a necessary purpose. Without them, lenders would have many difficulties figuring out who to lend money to. This would likely lead to them reducing the number of people they loan to, which would, in turn, prevent innovators from getting loans they need to start a business or undertake some other financial activities that could positively stimulate the economy. That being said, although they serve an important utility, the agencies tend to have a lot of outdated information that can be a terrible hassle to get fixed. Various borrowers have reported issues with misspelled business names, which can be troublesome if not disastrous. Many others have had issues with incorrect reports of a trashed apartment or a late credit card payment, which could wreck their credit scores for years to come.

It is very difficult to get such mistakes removed from your credit report. One study showed that over a quarter of customers had at least one potentially harmful error, and another study showed that even after those customers went through 3 years of paperwork, the majority of those errors still remain. Although the odds are not in your favor (at least the way current laws work), there are some steps you can take to fix issues with your credit score.
1) Submit an online complaint to the credit agency.
2) Contact the "furnisher" (the entity that provided the incorrect information).
3) If all else fails, hire a lawyer who specializes in the Fair Credit Reporting Act.

All of those options take time to sort out, but with enough patience, you should be able to eventually settle the issues associated with your account. Unfortunately, that could mean that you get stuck with very high interest rates for the foreseeable future. Try reaching out to your local lawmakers. Maybe with enough pressure from enough of their constituents, lawmakers may introduce policies that force the credit-reporting agencies to take customer complaints more seriously.

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Find out more about us at www.sepulvedaescrow.net. Any Questions? Contact our Escrow Expert! Sepulveda Escrow Corporation (818) 838-1831. Follow our company on Facebook, Twitter, LinkedIn, and Google+.

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