Experian, TransUnion and Equifax now offer all U.S. consumers free weekly credit reports through AnnualCreditReport.com.
In this article:
When buying a home and applying for a mortgage, you're required to share a lot of financial data and personal information. If that information falls into the wrong hands, it could be devastating.
To protect yourself and ensure a trouble-free homebuying experience, here are some steps you can take to better safeguard your personal information.
6 Steps to Help Protect Your Identity When Buying a Home
The homebuying process can be stressful for some, and the added threat of identity theft doesn't help. While there's no surefire way to avoid identity theft, here are six things you can do to minimize your exposure to it.
Ask for Referrals
Finding the right mortgage broker or loan officer can be difficult for many reasons, but it's especially important to ensure that you're working with someone you can trust. Before you start the homebuying process, talk to your network of friends and family members and ask them if they'd recommend any mortgage professionals they've worked with in the past.
Referrals could ease the process of finding someone you can trust, and make it more likely that you'll have a good overall experience with the person you ultimately choose to work with.
Barring any personal recommendations, it's always a good idea to go over the reviews that a mortgage professional may have gotten on websites like Yelp and Angi (formerly Angie's List). If reviewers complain of identity theft issues, that could be a red flag to steer clear.
Ask About Security
Before you share any documents or details with a mortgage broker or loan officer, ask about the steps they take to ensure that your information remains secure. For example, are they asking you to upload documents through a secure portal or send them through unencrypted emails?
Also, what policies do they have in place regarding who can view your information once you've shared it? How long will your documents be retained before they're destroyed? Make sure you understand both privacy and security policies before you share anything.
Also, think about your own security situation as well. For example, it's never a good idea to send personal information over a public Wi-Fi network. If you're at a local library or coffee shop, consider using a virtual private network (VPN) to create a private encrypted connection to the website you're using to upload documents or submit an application.
Finally, create unique passwords for the websites you use to upload your documents and other personal information. No matter how secure the mortgage professional's system is, it won't matter if someone can easily access it using your login credentials.
Secure Your Personal Devices
Even if you do everything right when transmitting information to the mortgage professional, hackers can still potentially access your devices and steal the information stored on them.
Make sure you use a passcode on all of your devices and avoid sharing it with other people. Also, keep your mobile devices on you at all times to avoid having them stolen by someone who can crack your passcode. Install antimalware software and keep it updated to help prevent your device from being compromised by hackers or a virus. Once the process is complete, make sure you delete the files in case your device is ever lost or stolen.
Shred Documents
If you've had to print out documents to provide to the mortgage professional, ask that they either shred the documents after they no longer need them or return them to you so you can shred them. That way, there's no risk of someone accessing your information long after you've closed on your mortgage and stolen your personal information.
Use a Credit Monitoring Service
Because it's impossible to completely avoid the threat of identity theft, it's critical that you monitor your credit during and after the mortgage process. For example, Experian's free credit monitoring service offers access to your Experian credit report and FICO® Score☉ powered by Experian data.
What's more, the service provides real-time alerts whenever there are changes made to your Experian credit report, such as new inquiries and accounts or personal information.
With a good credit monitoring strategy in place, you'll be able to respond to potential fraudulent credit applications and accounts before they damage your credit. It's also a good strategy as you get ready for your mortgage because it can help you improve your creditworthiness and potentially get better terms on the loan.
Trust Your Instincts
While mortgage brokers and lenders are required to uphold some strict data protection standards, there are bad actors in any industry who don't follow the rules as they should. If you ever feel uncomfortable during the homebuying process, don't hesitate to find a different mortgage professional.
This even goes for referrals you receive. Going through a friend or family member will increase your chances of working with a trustworthy professional, but it's not a guarantee.
What to Do if You're a Victim of Identity Theft
If you've already noticed signs of identity theft, it's crucial that you take steps immediately to address the issue. The longer a fraudster has access to your information, the more damage they can do. Here are some steps to help you get started:
- File a police report with your local police department, as well as an identity theft report with the Federal Trade Commission.
- Review your credit reports for accounts you don't recognize and consider filing a dispute with the credit bureaus to request to have them investigated.
- Add a fraud alert to your credit reports, which asks lenders to contact you in the future before issuing credit.
- If a thief has managed to steal your bank account, debit card or credit card information, contact your financial institution and alert them of the fraud so they can create a new account or card for you.
- Change your passwords to any of your important financial accounts, as well as your email account.
Throughout this process, it's also important to continue to stay on top of your credit. You can get a free copy of your credit from all three credit bureaus through AnnualCreditReport.com. You can also check your FICO® Score and credit reports for free directly through Experian. Even after you believe you've completely recovered from identity theft, stay vigilant in case your information is still out there.
The Bottom Line
Buying a home can be an exciting time, even if the mortgage process can be onerous. The last thing you want to deal with on top of everything is identity theft. Instead of waiting until something happens, make it a priority to take measures to protect yourself from the possibility of someone stealing your personal information and using it for nefarious purposes.