Mortgage 101 – Responding to the Threat of a Data Breech

Clinton Wilkins and Todd Veinotte discuss the importance of credit monitoring, especially in light of the recent Nova Scotia Power cyber breach affecting 200,000 customers.

Todd Veinotte
All right, welcome back to Mortgage 101; your guide to home ownership with Clinton Wilkins and Todd Veinotte, and he was a fantastic guest.

Clinton Wilkins
It’s amazing learning about something new. It’s so great to have Trevor on talking about CHIP reverse mortgages. There’s so much to learn there. I feel like we could have talked for an hour just about the nuances. There are so many of our borrowers who have aging parents. My parents just need some financial advice, and they’re calling me and all these things. And it’s good to learn about something new. I’ve done some with Trevor before, but I think there’s just a big, big opportunity. And there’s so much of our population that is getting older and older, and a lot of them are turning these houses free and clear. So I think there’s a big opportunity to help people put themselves in a better financial position and keep them in their homes alone.

Todd Veinotte
Of course, a reminder, if people feel as though they want more and more of those answers.

Clinton Wilkins
Reach out to me because I can run the calculator with them to see if it makes sense, or does another product makes sense. And I think it’s just about having an evaluation on.

Cyber Breach at Nova Scotia Power

Todd Veinotte
Okay, for sure, let’s talk about something that’s been in the news. This past couple of weeks, certainly been hot on my talk show, and that is the privacy, the cyber breach with Nova Scotia Power. And a lot of people have concerns because Social Security numbers were compromised. We don’t know exactly how many, but a lot of data, including Nova Scotia Power customers, is available.e I heard the number was at 200,000. I’ve heard that employees in those countries of power have had information compromised, which is very sensitive as well. So the bottom line is, is that we always should be hyper vigilant about our credit, and you’ve talked with this a lot. Credit, credit, credit, when you’re talking about a mortgage, is so important. So, what are some ways?

Clinton Wilkins
The be-all and end-all? But it is very important. And it’s not just about getting a mortgage, Todd, getting a job, getting an apartment, getting a car, a credit card. You need to have decent credit. Oh, sometimes it becomes more challenging.

Todd Veinotte
But it does touch on mortgage lending in a massive way. So you’ve talked about this a lot, and it’s paramount now. And what are some ways that people can monitor and protect their credit?

Using Credit Monitoring Apps and Personal Data Security

Clinton Wilkins
I think first, there are a couple of free apps we’ve talked about before. There’s a borewell, which is tied to Equifax, and Credit Karma, which is tied to TransUnion. The reason they’re free is that they’re gonna try to sell you some credit products. You don’t have to take it, but you still have to give them your personal information. So you need to be able to trust these apps. And they will monitor your credit, and they are gonna update your score and your report every week for free, and it doesn’t impact your credit at all. You can also if you don’t want to be sold anything if you don’t want to, give a third party your information. You can go directly to Equifax, you can go directly to TransUnion and sign up for credit monitoring, but their services are somewhere around $30 a month each.

Todd Veinotte
Okay, so is there a rule of thumb for which vendor lenders use?

Clinton Wilkins
Different lenders use TransUnion. I would say all lenders report to both. Some will pull both. Different insurers will pull both. So it really depends which lender what type of product you’re getting, and sometimes people score on one versus another is higher or lower. And I would, I would stress to our listeners that small changes in your score are not a big deal. I monitor one I use, eBorrowell and Credit Karma myself. Sometimes my score goes up and down, two, 3.5 points every couple of weeks, because it’s updating data all the time. Your credit card statement, your line of credit statement, and post your mortgage updates. So there’s an algorithm that changes as well. So your score is going to change all the time, so don’t worry if they’re small. Changes, not a big deal. And inquiries are the smallest piece of the score. I mean, people think inquiries are the biggest piece, no, paying your bills is the biggest piece, number one, and that stays on the longest, six years.

Todd Veinotte
So if you sign up for Equifax, let’s suggest and do they notify you if somebody tries to open up credit?

Clinton Wilkins
In your name, everything you get a notification for is an inquiry, a new account change in your score? Public records. There are so many different categories that will report to you, and they’re gonna send you an email every time there’s been a credit factor that has changed.

Todd Veinotte
All right, so if that’s something that you have not done yourself, what steps then do you take?

Clinton Wilkins
I would sign up for whether you’re gonna go to the free route or the paid route. And I’ve heard that Nova Scotia Power and AMERI they’re providing some free credit monitoring, I think for TransUnion, for two years, truly, two years for TransUnion. I don’t think that’s enough. No, I think you need Equifax and TransUnion, because they’re going to show different things.

Handling Fraud and Setting Fraud Warnings

Todd Veinotte
So you need both, right? Okay, so what I’m getting at is, let’s, let’s say that you signed up for TransUnion, which I’ve done, and I get an email saying that somebody tried to open a visa in your name.

Clinton Wilkins
Then you need to contact that vendor right away, yeah, and the sooner you strike, the better the chances are to be able to shut it down. You can also put a warning on your credit bureau to say, Do not grant credit until you call me, really, but you need to make sure it’s your telephone number. So many times, people put these warnings on there, and it’s their home number, and if you’re not answering, it’s a pain. You need to make sure it’s your cell phone if you’re gonna put it on there, but that means you’re gonna get no automatic credit approvals. Everything’s gonna go to manual underwriting. And I think those warnings will stay on for six years. So you can put a warning on TransUnion, and you can put a warning on Equifax.

Todd Veinotte
Does it cost to put the Union or the warning on it?

Clinton Wilkins
No cost and say, do not grant credit without doing a verbal, really, and it’s basically what we call a fraud warning.

Todd Veinotte
And there’s no so to me that that makes a lot of sense.

Clinton Wilkins
Especially if you’re not looking to get automatic credit approvals, like, if you’re like, I don’t need any credit if I’m gonna get a mortgage, sure, they can call me, no big deal. And I see this happening all the time, usually, what we refer to as a lost wallet, and that’s usually say lost wallet. Do not grant credit without calling, right? So it would be the same thing, to be like you could put on a data breach. Do not grant credit without calling me, yeah. And it puts on an additional safeguard. So if you were involved in this breach, and I’m not sure everyone that was involved already knows they’re involved or not, but if you were involved in this, Nova Scotia, power, America, breach. If you’re okay not getting automatic approvals, put on the fraud warning, then okay, so it’s not gonna hurt, and it will stay on there for six.

Todd Veinotte
Right, so that doesn’t mean that you have to sign up for the regular credit monitoring.

Clinton Wilkins
I would still do it. Yeah. I mean, more is more, especially if you’re looking to protect yourself, right? But some people just get so anal on the credit score. A change in your score of two or five points makes no difference. Literally no difference. But people are just, they want that unicorn, the score is out of 900, they want to have the 900, for me, I don’t have any installment debt, I don’t have any loans. I just have a line of credit and, credit card, so my score is not as high as it potentially could be. So, any score really above 737.40 is perfect. You don’t need to worry if your score is in the 800s; you’re even better. People want to get to the 900, but it’s not something that people need to worry about. There’s nothing that’s going to hold you back from having a score of 700. 700 is still a great score. Once it goes below 700, Todd, we typically need to answer some questions like, why is it low? Is it utilization? Are there missed payments? Are there some public records on there, like what happened? Was there a collection? There’s a reason why it’s below 700.

Todd Veinotte
So if somebody does fraudulently open up an account and is using it, and you find out about that, and you need to call that creditor and but can you imagine how difficult it is to prove that that stuff? It can be a real problem.

Clinton Wilkins
It can be a problem. But they have to have a lot of data points to be able to open an account. They need to have your name, date of birth, social insurance number, and sometimes address.
That’s why it’s important to keep an eye on the credit. And if you see something that is unusual, strike while the iron is hot, because I get clients in and say, That’s not my account, that’s not my account, that’s not my account. But think if you had the same name as your father or your grandfather, sure, there can be some problems, because oftentimes people will do credit applications but not give their freaking sin number, so they try to best match to the person. But if you’re not giving your SIN number, that can be a problem. So I’d also recommend, if you’re gonna do an actual, real, legitimate credit inquiry, do it with your SIN number. You’re gonna get the most accurate, probably, inquiry at that point. So sometimes there can be multiple bureaus, so it can be mismatched.

Data Retention Policies and Industry Standards

Todd Veinotte
So you send it for the free apps that you’re just you’re talking about, you have to provide your SIN.

Clinton Wilkins
I think so. I’d recommend giving it but when we’re talking about things like a Nova Scotia Power, housing or sin, I think there were some privacy problems there absolutely, typically, different industries have different requirements on holding data as well, but I heard that they do have, they had data from like, years and years ago. So I think it was probably a policy issue around retention of data and what data points needed to be retained. We don’t know about their system. Their system could have been something that they built 30 years ago, and they have all the data. They have all the data from 30 years ago, which they did not need to have. You probably only need the data from the last six or seven years, for example. So the scope could have probably been smaller. But I think, and I hope this will help strengthen Nova Scotia Power and Ameris’ data policy. And I think other big companies will take this issue and build their best policy to help protect consumers.

Todd Veinotte
Before we run out of time, as always, how do people get hold of you?

Clinton Wilkins
Check us out online at teamclinton.ca/radio. We have hundreds and hundreds of blog posts. We have social links to our social accounts. You can see what Todd and I look like, and I thank all our listeners for supporting us over the last several years. We have a whole bunch of new shows coming into later in the year, and I’m sure there’s gonna be lots of great content as well.

Todd Veinotte
Mortgage 101: Your guide to home ownership. Thanks for listening.