Replies

It's not just Equifax. All of these companies store my information without my permission. All three should be automatically freezing everyone's account. Then people could decide if they wanted the freeze lifted or they want the information deleted. I checked with my local bank. There's no way to do that. That would be in my make-believe world that really cared about us as people rather than as a crop to be harvested for maximum financial benefit for the big guys.

It's mind boggling. We're supposed to give the company that didn't protect our information information so that they can't divulge it to others. Shouldn't the freezes go through a third party that we can hopefully trust?

My temptation is to put my meager life savings into local bank CDs so it can't be withdrawn and to shift all the banking I can to a local bank and keep my end of the banking off line.

When you sign a credit agreement with a credit grantor, somewhere in the fine print that no one ever bothers to read is authorization for the credit grantor to share information with a credit reporting agency. So, you did give permission to the credit grantor to share information with the bureaus. Take a look at the credit application you signed.

What the bureaus do is compile the information and store it in a time series of snapshots of an individual’s credit behavior. Number of trade lines (individual credit accounts) open, number of current, 30, 60, 90 days past due trade lines, total credit limits, percentage of credit limits utilized, etc., etc., etc., are stored. Public record information is augmented (bankruptcy filings, court judgments, etc.) to that data. Credit grantors who are deciding whether or not to loan you the money for your new car or home, or to issue you a credit card, use that information - most often in the form of a score (e.g., FICO) built on that data - to predict risk and make an optimal decision (accept, reject, accept with limit conditions, etc.)

Having that information available reduces risk, and lowers the cost of credit.

There are three major bureaus (Trans Union, Equifax and Experian.) There are regular attempts to create a fourth bureau or to create other predictive databases, but they have not succeeded.

I’m not defending Equifax in this data breach issue. Their site indicates that I am likely among the 145.5 million who were accessed in the breach. Not too pleased by that, but unwilling to accept their arbitration-limited set of remedies. I’ll wait and see and preserve my right to participate in class action settlements.

That said, credit bureaus perform a clearinghouse function that systematically reduces the cost of credit. If you could throw a switch and make them disappear tomorrow, lacking that information, credit grantors would have to raise the cost of credit to cover the increased risk.