Does a Data Breach Affect My Credit Score?
Being the victim of a data breach may cause direct financial losses, but it also can have longer-term effects. Depending on what bad actors do with your data, you may suffer consequences that severely impact your credit score and your ability to achieve your financial goals. These issues may follow you for years and prevent you from securing a home mortgage or a car loan.
At Class Action U, our mission is to help consumers better understand their right to seek compensation after a data breach. We’ve helped thousands recover both financial damages and peace of mind. If you’re wondering how a data breach may impact your credit, we can help.
Can a Data Breach Affect My Credit Score?
The good news is that a data breach alone can’t affect your credit score. Credit scores are based on your payment history and how you use your access to credit, not your personal information or who has it.
However, a data breach does expose your personal information to bad actors. Criminals may sell your information on the dark web or use it to secure fraudulent loans and make unauthorized purchases. They may even try to file a tax return in your name to obtain a refund.
By acting quickly after your personal information is compromised, you can help protect yourself from financial fraud and loss, along with any subsequent hit to your credit score.
No matter the type of data breach, you may consider consulting an attorney with experience in the area. They can help you protect your privacy, calculate any financial losses, and seek damages for harm done to you.
Indirect Impacts of Data Breaches on Credit Scores
There are several ways a data breach can affect your credit.
Identity theft, where criminals open bank accounts and credit cards in your name, can severely impact your credit. You may not even know about the charges they rack up in your name, causing missed payments that lower your credit score. Such criminal activity may also block your access to needed funds in an emergency situation.
Having your identity stolen can be expensive. You may need to pay for additional credit monitoring and protection, perhaps for years. This can increase your financial strain, especially if you’re already suffering from criminals putting debt in your name.
A lower credit score can make it harder to reach your financial goals, such as securing a car loan or purchasing a home. Your applications for new lines of credit can be delayed. Even if you get the credit you want, your creditor may require you to pay higher interest rates or put more money down.
A data breach can have long-term ripple effects. Taking action as soon as you suspect identity theft can help reduce the consequences for your finances.
Why Is It Important To Recognize the Early Signs of Identity Theft?
A data breach can affect many parts of your life. By recognizing the signs early, you have a chance to do the following:
- Minimize direct financial impact: Discovering identity theft early helps limit the amount of money fraudsters take directly from your accounts and the purchases they make against your credit.
- Prevent long-term credit damage: Early detection of identity theft can limit long-term damage to your credit score and ability to borrow.
- Resolve the situation faster: Take prompt action. The sooner you freeze your credit and report fraudulent activity, the sooner you can move past the situation.
- Protect personal information: Learning about identity theft means you can take steps to secure personal data, such as health information, that hasn’t yet been stolen.
- Avoid stress: Identity theft can affect your well-being, and untangling the problems can be lengthy and costly. Early action can help reduce stress on you and your family.
What Is One of the First Actions You Should Take When Victimized by Identity Theft?
After a data breach, take the following actions promptly to minimize the damage of identity theft:
- Report the fraud to the three major credit bureaus. Putting a fraud alert on your account can prevent others from opening a fraudulent account if a credit check is required.
- Report the crime to the police. A police report can be valuable when filing a lawsuit.
- Request information on fraudulent accounts from your creditors. This will show if any accounts have been opened in your name.
- Call your creditors to shut down fraudulent accounts that the thief may have opened.
- Review your credit reports. Watch for sudden drops in your credit score, and contact the credit bureau if you see incorrect information.
- Complete the FTC identity theft affidavit. You can find resources to help you recover from identity theft.
- Write to the credit bureaus following up on your fraud alert. This will make a written record of your request.
- Request additional free credit reports. If you place a fraud alert on your credit report, you are entitled to a free credit report.
What Types of Stolen Data Are Most Likely To Affect My Credit Score?
Unsavory actors may have access to significant information about you after a data breach. The following information is particularly valuable to thieves and can be particularly hazardous to your credit score if stolen:
- Social Security number: This is one of the most valuable pieces of information about you. If an identity thief has it, they can open a new credit card, apply for a loan, file taxes in your name, or commit other forms of identity theft.
- Credit card details: Criminals can use your credit card number, CVV, and expiration date to make unauthorized purchases. If these transactions go unnoticed, you could miss payments and take a hit on your credit score.
- Bank account numbers: With your bank account numbers, identity thieves can make unauthorized withdrawals and payments. If these transactions cause you to rack up overdraft fees, your credit score could be affected.
- Passwords for financial accounts: Criminals may access your bank information by logging into your account on a financial app such as PayPal. In addition to making purchases directly, they may be able to learn your account numbers or other information.
Seeking Legal Help: The Next Step for Data Breach Victims
The effects of a data breach can cause financial loss and emotional stress, especially if the breach negatively impacts your credit.
An experienced data breach attorney can help you determine your losses and understand your legal options for seeking compensation. You have a right to sue a company for a data breach, and working with a data privacy lawyer helps you build a strong case and pursue the best strategy.
Class Action U has helped thousands of data breach victims receive compensation for their losses. We make it easy and stress-free to exercise your rights. Justice starts with knowledge. Learn your rights today. If you’re worried a data breach may affect your credit score, contact us today for a free, no-obligation case consultation.
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