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How Belgium deals with credit without Equifax, Experian, and TransUnion

Ethan Wolff-Mann
Senior Writer
The Equifax data breach has brought up conversations about data ownership, control, and security.. REUTERS/Dado Ruvic/Illutration

Following Equifax’s massive data breach that compromised 143 million social security numbers and other important financial information, a common refrain was heard: “I don’t recall allowing Equifax to have all of this information.”

Credit reporting in the U.S. has been dominated by three companies, Equifax, Experian, and TransUnion, yet many people don’t even realize that these companies are compiling massive files on them. And now that there’s been a breach, they don’t like it.

But what would a world without these three companies controlling consumer credit data as a commodity look like? In Europe, privacy is viewed differently by the public, and one country stands apart from the rest — Belgium.

“[Much of Europe is] offended in many ways about how our credit reporting agencies work,” said Ira Rheingold, executive director of the National Association of Consumer Advocates. “[That’s because] it’s your information so you should be able to look at it anytime you want. It’s so difficult to get something wrong in your credit report fixed.”

Instead of relying on big credit bureaus or other similar private companies, Belgium takes the full European view that privacy is king and has developed its own system.

Belgium’s solution has been its own public credit bureau, housed at the National Bank of Belgium, the country’s central bank. The bureau began to fight over-indebtedness and began solely by cataloging negative marks to people’s credit. Later, it added positive marks as well, allowing “no credit” and “good credit” to be distinguished.

“Anytime you enter into a credit contract, the lender sends that to the federal bank database. And then if you wanna borrow from someone else, that lender has the duty to look at that database to make a determination of what your financial situation is,” said Rheingold. “A lender will see what debt this person has and make a determination.”

Whether it functions better as a tool to examine people’s credit is up for debate. Rheingold says the system isn’t perfect. But its view of privacy — your data is not a commodity — is a compelling contrast worth examining post-Equifax breach.

“If another person wants to look at your file, they have to have your consent,” he said. In this version, it’s your data and you point your potential lender to it. “It’s not a commodity a person is selling.”

This is a stark contrast to credit reporting in the U.S. Even without a major data breach this was considered a problem by consumer advocates, but Equifax’s terrible gatekeeping of such vital financial and personal data has sharpened the question of data ownership.

“The whole Equifax debacle is about consumers’ control over information,” said Rheingold. “For Equifax, your info is their commodity.”

In the current system, consumers have little say in where their data is as well as extremely limited access to it. Regulations give consumers the right to glimpse your file once every 12 months for free on AnnualCreditReport.com. If you want further access to your own data, you are required to pay for it.

As to whether any of this will change or improve now, with raised awareness, Rheingold is not holding his breath.

Ethan Wolff-Mann is a writer at Yahoo Finance. Follow him on Twitter @ewolffmann. Confidential tip line: emann@oath.com.

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