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Equifax Will Offer Free Credit Locks for Life, New CEO Says (bloomberg.com)
Equifax will debut a new service that will permanently give consumers the ability to lock and unlock their credit for free. From a report: The service will be introduced by Jan. 31, Chief Executive Officer Paulino do Rego Barros Jr. wrote in a Wall Street Journal op-ed Wednesday, a day after taking the helm. The company will also extend the sign-up period for TrustedID Premier, the free credit-monitoring service it's offering all U.S. consumers, he said. "The service we are developing will let consumers easily lock and unlock access to their Equifax credit files," Barros wrote. "You will be able to do this at will. It will be reliable, safe and simple. Most significantly, the service will be offered free, for life." Barros was named interim CEO on Tuesday, less than three weeks after Equifax disclosed that hackers accessed sensitive data for 143 million U.S. consumers.
They just gave up enough information to recreate everyone's identity.
If they're going to make it EASY to lock AND UNLOCK your credit... does anyone else see the problem here?
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Credit and debit card info is already protected by law in the U.S. A merchant cannot give or sell it to someone else. They can't even keep a copy of it legally.
Unless you agree to let them. That little checkbox that says "save my credit card info for future purchases"? That's not just for your convenience. That's what grants the merchant permission to store you credit card info in their database.
This right here is the problem with your approach. The info the credit bureaus collect wasn't disclosed by you. It was disclosed to them by the other party in the transaction - the people and companies you did business with. If you paid a bill late, the person (e.g. landlord) or company (e.g. the power utility) reported that to one or more credit bureaus. Likewise if your credit card has a $10k credit limit and use $2k of it on average and you pay it off on time each month, the credit card company reports that to the credit bureaus. So while the info is about you, it's not provided by you. It's provided by others that you interact with financially. Your credit report is basically a collation of Yelp ratings on you by everyone you've interacted with financially.
So why not pass a law prohibiting others from reporting your financial behavior to the credit bureaus? We could, but it won't have the effect most people seem to think it will. There's so much hatred for the credit bureaus, that most people don't understand that the only thing the credit bureaus can do is help you. If you have no credit, that's the same thing as having bad credit. Lenders have to assume the worst case scenario to protect their finances. (The exception is when you're in college - then it's known that you're just starting out and have a good reason for having no credit history, so the eventual credit for college students is slightly better than the average adult.) How willing are you to try out a restaurant with no Yelp reviews? You probably wouldn't risk taking a first date there or holding a family reunion there - you'd minimize the risk by trying it out first alone or with a few friends. Likewise, if a lender knows nothing about you, they're going to assume the worst - that you're highly unlikely to pay back any money they lend you, and charge you a high interest rate accordingly.
Unless a credit bureau vouches for you and reports that you're good about paying your bills, and are low risk. When a lender sees that, they're more willing to lend you money and will charge you a lower interest rate for it because they are confident you are low risk. In other words, the normal state isn't easy loans and the credit bureaus making your life hell when you have poor credit. That hell state is the normal state, and the credit bureaus make your life easier when they say you have good credit.
Prohibiting people and businesses from reporting this info about you to the credit bureaus will make it on average harder and more expensive for you to borrow money, not easier. Which gets us back to that little checkbox for storing your credit card info. Every loan you take out, every credit card you own, every lease you sign, every service you sign up for with a monthly bill will have a similar checkbox requesting you give them permission to report your financial behavior to the credit bureaus. Fail to check that box and you'll just consign yourself to the worst possible credit rating,