HOW EQUIFAX DATA THEFT COULD AFFECT YOU OR YOUR KIDS WHEN BUYING A HOME
Home buyers and mortgage applicants tend to have significant information on file at the three credit bureaus and could run into complications soon or down the road.
Take this scenario: Say your Equifax file was looted but you’ve done little or nothing to detect fraudulent activity on one or more of your credit accounts. You sign a contract to buy a house, and you apply for a mortgage. The lender pulls your credit and confronts you with shocking news: Your FICO credit score is too low for you to qualify for the loan because you’ve been running up too much debt on one or more accounts. Your “utilization ratio” on your available credit is too high, and that has depressed your score. Or there’s a newly established account in your files that has put you deep in debt, even though you had nothing to do with it.
It turns out that financial thieves have been racking up thousands of dollars in debts at your expense, and now — smack in the middle of a major lifetime investment — you’re stuck with having to get the file corrected, which takes time and can be a pain. In the meantime, what happens to your purchase contract? Will the sellers bear with you, essentially putting off the transaction indefinitely and possibly blowing up their own plans to move into another house on a specific date? It could all get really messy.
Another scenario: Say your lender already has approved you for a mortgage or a home-equity loan. Before the scheduled closing, the loan officer does what has become standard practice in the mortgage industry in recent years — runs another credit check to make sure no new debts have been added since your application. But in the meantime, identity-theft criminals have created a new account or run up charges on one or more of your credit cards, knocking your debt-to-income ratio out of sight.