Credit Card News: Security

Credit score experts FICO have joined a program aimed at keeping people’s personal information safe and preventing data breaches and fraud.

The EU-US Privacy Shield program requires FICO to comply with data protection requirements laid down by the EU when they transfer personal information from the EU to the US. It is a voluntary self-certification. “Joining the Privacy Shield further demonstrates our commitment to respecting the privacy of our clients and their customers,” according to Vance Gudmundsen. “FICO has always been in legal compliance with EU privacy law, because we use Standard Contractual Clauses (also called “model clauses”) in our client contracts.

Data breaches are cause for concern

Over the past several years, there have been a number of high profile data breaches that compromised the financial lives of credit card holders, debit card users, and anyone who uses a payment method other than cash to buy something, either online or in a brick and mortar store.

Target, Nieman Marcus, Best Buy, and others have all fallen prey to massive data breaches, leaving their customers’ information exposed and vulnerable to fraudulent use. And while most credit cards offer zero liability for fraud, it’s still a pain to deal with having your credit card hacked or your identity stolen.

EMV chip cards provide some relief

Within the past few months, most credit card issuers have switched to EMV, or chip cards, which provide better security for their cardholders. With chip cards, you insert your card, rather than swiping a magnetic stripe. Most cards do come with both the stripe and the chip, so they can be used whether or not the store owner has upgraded their payment system.

FICO provides credit scores for millions

FICO provides credit scores to millions of people, giving them a rating that signifies how good a credit risk they are. Prospective lenders, including banks, credit card issuers, landlords, and even employers, might check a candidate’s FICO score to determine whether or not someone is going to pay their rent, pay off their debt, or even just be a person with their head firmly on their shoulders. However, a low FICO score does not indicate a lack of character. Rather, someone’s credit history may have suffered after a divorce, unemployment, or other unexpected event out of their control.