How safe is your personal data that you submit on a mortgage application?
It's an important question, because that application contains the family jewels when it comes to financial information - social security number, bank accounts, employment information etc. That makes it well worth understanding how to improve your data security for mortgage applications.
How safe is your personal data on a mortgage application?
Lenders need detailed information about your finances. And if you are applying to more than one lender you are distributing that information more widely. Here are three things that could go wrong with that data:
Institutional data breaches.
According to digital security firm Bitglass, financial services firms reported over 100 data security breaches in 2018. When you submit sensitive information on a mortgage application, especially if you do it online, you have to be prepared for the possibility that it might be compromised.
Misuse of information.
Identity theft isn't your only worry. Some disreputable lender representatives dupe people into signing things they didn't intend to. Even more commonly, some firms sell consumer information to other organizations for marketing purposes.
Intercepted data.
From hacked computers to intercepted WiFi signals to lost or stolen smart phones, there are several ways your mortgage application data can be compromised, paving the way for identity theft.
Related: What Documents Do You Need for Mortgage Preapproval?
Data security for mortgage applications: 9 steps
Given the different ways your data can be vulnerable, here are some steps you can take to protect yourself.
Research the lender before you apply.
Make sure you are dealing with a reputable firm. And narrow down your search before submitting information to lenders so you can limit the number of applications you have out there.
Use your right to control information.
Lenders must by law provide consumers with written disclosure of how they use your financial information. They must also indicate if they share it with non-affiliated third parties. You have the right to refuse to allow third parties access to your information. This allows you to avoid marketing pitches and limits your exposure to identity thieves
Know what you are signing.
Don't trust anyone who tries to rush you into signing anything. Read and understand it first. Also, never sign a document with blanks on it just because someone assures you "oh, we'll fill those in later…."
Don't conduct sensitive correspondence by e-mail.
Ordinary e-mail is not only a fairly vulnerable form of electronic communication, but it also creates a record that hackers can discover at some future date.
Only use encrypted online forms.
Online application forms are convenient and can be more secure than e-mail, but only use them if they are encrypted. Look for a lock icon on the status bar of your browser to see if a web page is encrypted.
Take security protocols seriously.
From using varied and obscure passwords to updating your software and security protection regularly to turning your computer off when not in use, there are a number of simple, common-sense things you can do to reduce your vulnerability to a hack attack.
Location, location, location also applies to data security.
WiFi and Bluetooth signals can be intercepted, so be careful where you are when you transmit sensitive information via computer. Besides not using public WiFi networks for that kind of business, password protect your home network - especially if you live in a densely populated area where lots of neighbors may be within range of your WiFi signal.
Be careful what you carry.
Research from Kaspersky Lab found that less than half of consumers password-protect their smartphones. Given how often these devices are lost or stolen, that makes them a poor choice for transmitting financial details. If you must do this kind of business via smartphone, you should not only use a robust password but also install security features like location tracking and remote locking and data wiping capabilities.
Keep a close eye on your credit report. Even with all these precautions, identity theft happens. So, after you submit a mortgage application keep an eye out for anything unusual. You may have checked your credit report before applying for mortgage, but you should check it again afterward, and perhaps sign up for a credit monitoring service.
Even if you fill out your mortgage application the old fashioned way - by hand, in a lender's office - your information is vulnerable to some extent because the financial institution will store it on a computer. You can't totally avoid the threat of a security breach, but the better you understand this threat the more you can limit its impact.
