Disclaimer, I work for TransUnion. The following thoughts are my own.
The theory behind this implementation is that probably no one other than you knows what the amount of the mortgage you took out in 1999 is or the size of the car loan you took out in 2015. So in theory it confirms that you are the person who the credit report belongs to. In practice it gets tricky because there are plenty of people who have super boring credit files (e.g. they only have a credit card and have never had a loan). With that kind of user you end up in the situation where the questions either ask about information that can probably be gleaned from public records or the answers end up being “none of the above.” For those users specifically it is a pretty useless solution. I remember signing up for Credit Monitoring and thinking that anyone with a passing knowledge of my life could answer the questions.
It turns out that verifying that someone is who they say they are without needing to see a valid ID is a hard problem to solve.
Is it a great solution no, but before data breaches became so common it was a somewhat reasonable solution. In today’s world though I would agree that it is a pretty terrible solution, but I don’t know how you would solve that without requiring notarization from a trusted third party that the person is for sure who they say they are.
The theory behind this implementation is that probably no one other than you knows what the amount of the mortgage you took out in 1999 is or the size of the car loan you took out in 2015. So in theory it confirms that you are the person who the credit report belongs to. In practice it gets tricky because there are plenty of people who have super boring credit files (e.g. they only have a credit card and have never had a loan). With that kind of user you end up in the situation where the questions either ask about information that can probably be gleaned from public records or the answers end up being “none of the above.” For those users specifically it is a pretty useless solution. I remember signing up for Credit Monitoring and thinking that anyone with a passing knowledge of my life could answer the questions.
It turns out that verifying that someone is who they say they are without needing to see a valid ID is a hard problem to solve.
Is it a great solution no, but before data breaches became so common it was a somewhat reasonable solution. In today’s world though I would agree that it is a pretty terrible solution, but I don’t know how you would solve that without requiring notarization from a trusted third party that the person is for sure who they say they are.