But what does it matter? As long as you protect your bank account passwords, taking the proper precautions, you should be safe, right? The reality is that this isn’t the case. The information a hacker obtains from a data breach can matter to your credit report, and that means it can impact your financial future.
How Data Breach Information Ends Up On Your Credit Report
Hackers aren’t compromising databases and taking advantage of vulnerabilities because it’s fun. The fact of the matter is that these actions are profitable. Your personal information can fetch a high price. If a hacker gets your credit card number, it might be possible to make fraudulent charges, providing him or her with free items.
You can protect against this by changing your credit card number, and also by reporting it so that you aren’t held liable. Also, you can improve protections on your bank account by regularly changing your password for online account access. That way hackers taking advantage of vulnerabilities don’t have the best information.
But selling your personal information goes a little bit deeper. It’s more than just getting account access and draining your accounts (although that can do plenty of damage). You also need to be concerned about having your name, Social Security number, and address sold to the highest bidder. When that happens, a fraudster can use the information to open an account in your name — and that’s when it appears on your credit report.
Why It Matter When Someone Opens a Fraudulent Account
A fraudulent account on your credit report can lead to financial problems for you. First of all, it shows up as your debt. A scammer can open an account in your name, and then take the money and not make payments. They get the money, and it looks as though you are delinquent. This lowers your credit score and can lead to you getting rejected for your own loans, or even missing out on benefits like lower insurance premiums and better rent rates. One of the reasons to check your credit report regularly is to pinpoint fraudulent accounts and have them removed.
Even if a fraudulent account is paid up, it can still impact your ability to get credit. If a scammer’s account on your credit report shows that you have the outstanding debt, it can make your debt to income ratio unattractive — and result in rejection or in higher interest rates. You could end up paying more because of this fraudulent account.
Whenever you get word of a data breach, it makes sense to backtrack. Keep a close eye on your bank and credit card accounts, and check your credit report. You need to be vigilant so that you can see if someone has your information and is using it for their own gain — and your loss.