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People have become increasingly reliant on credit. Using credit means you are borrowing money that you vow to repay within a specified time. Your credit scores are a statistical way to determine your likelihood to repay the money borrowed. Factors considered by the credit bureaus (Equifax, TransUnion and Experian) are generally a combination of: your credit history, your current debt, your length of credit history, the credit type and the frequency of applications for new credit.
When you apply for a credit card, a mortgage, a new apartment or even a cell phone, your credit rating is checked and depending on your credit score, lenders will determine the risk associated with this "new credit". As a rule of thumb, the higher the score, the better the terms of the loan are.
As you may have already heard, Equifax announced that earlier this year, they had a breach within their database which contained the personal information of around 143 million people. This personal information included Social Security numbers, addresses, birthdays, and even credit card numbers.
This breach is now one of the worst hacks in recent history and knowing that someone may have your personal information to open credit is very concerning to say the least. Equifax has provided a website to see if your personal information has potentially been compromised.
Experts are recommending you lock down access to your credit files which blocks anyone trying to apply for a loan or credit card in your name, steal your identity, etc. Whether or not you are interested in purchasing a home or refinancing in the future, we want to ensure you keep your personal information protected. Overlooking the importance of credit could be detrimental to a good credit score and credit history.
Please note, by refinancing your existing loan, your total finance charges may be higher over the life of the loan.