It seems these days it’s only a matter of when not if a business or database gets hacked for personal information stored therein. We often don’t think about how much of our personal and financial information is floating around, but we must bear in mind that that information is valuable to thieves who think nothing of identity theft.
Here is some perspective when it comes to your data. Over the next decade, the average online user is expected to have roughly 200 online accounts to businesses they either actively use or, for the most part, leave alone. Many of these accounts required personal information to set up such as passwords, contact information, addresses, employer information, credit card numbers, and even your social insurance number. The information is just sitting there. It’s no wonder crooks hack into businesses. If they have that information they can open up accounts in your name, spend your credit card limit, access government programs, or simply sell the valuable data list.
Recently, well-known credit reporting agency Equifax was hacked and the information of over 143 million Americans was compromised and many in Canada and the UK as well. It was one of the biggest data breaches in North America so it begs questions: How does a credit reporting bureau get all of your information and what rights do you have to protect it?
To put it simply, every time you apply for credit of any sort, be it a simple low limit credit card, car loan or even mortgage, your lender reports it to a credit bureau. These reports usually go to the two big bureaus; Equifax and TransUnion. In the U.S. it might get sent to Experian as well.
Why do lenders have this right you ask? Because lenders take risks giving out credit and they want to have a reasonable assurance you have the ability and level of responsibility to pay whatever it is back.
Credit reporting in Canada is handled at the provincial level and there is legislation in place that governs what a credit reporting agency can and can’t do with your information. Thankfully, not just anybody can access your credit report. Those seeking that information must have a business reason to do so. This can also include a landlord seeking assurance you can pay rent on time.
According to credit bureau TransUnion; These purposes must relate to activities such as credit decisions, collection of a debt, employment decisions, tenancy decisions, underwriting of insurance, determining a consumer's eligibility under a statute or regulation, or any decision where there is a direct business need for the information in connection with a credit or business transaction involving the consumer. Note that it is an offense for anyone to obtain credit information from a credit reporting agency except for the stated purposes.
For further information on rules governing credit bureaus, the government of Canada information can be found here.
For a list of further questions surrounding fraudulent use of your credit report, TransUnion Canada has some answers: FAQ