How to Borrow an Online Line of Credit Safely


When money’s tight and you can’t ignore your check engine light any longer, a line of credit can help you afford an auto repair.

Like many modern borrowers, you might apply for this loan online. It’s an easy and convenient way to get fast cash, but there are security risks involved. After all, you have to entrust your personal information with your lender at a time when data breaches are on the rise.

To make sure your personal information doesn’t fall into the wrong hands, check out this guide. It shares security features and cybersecurity habits that can protect you from fraud.
Look for These Security Features in a Lender

Line of credit lenders have a responsibility to invest in digital security to provide safe and secure borrowing options online.

1. Industry Standard Encryption

The financial world runs on 256-bit encryption. 256-bit encryption scrambles data shared between borrowers and lenders so that anyone eavesdropping can’t see personal information while in transit. Only your lender will have the 256-bit key that unscrambles this data so that it’s readable.

Why is this encryption important? It contains 2256 possible key combinations, making it virtually impossible to crack — even with the most powerful computers.

2. Transparent Privacy Policies

With powerful encryption methods, your lender should be safe from hackers. But what if they give away your personal information to another organization? It’s more likely than you think. BetterHelp, the popular online therapy service, is the latest company in hot water for selling sensitive user data without permission.

The typical online lender will have a lot of information on their borrowers. They need this data to make underwriting decisions, deliver funds to the right account, or share payment history to credit reporting bureaus.

This exchange of information is legitimate. However, you will still need to know how they intend to collect, use, and disclose this information in a privacy policy so that you can make accurate decisions about your security.

Cybersecurity Habits That Protect Your Finances

The onus of security isn’t completely on your lender. Fraudsters will look for weak links anywhere, so you don’t want to make yourself a target with bad cybersecurity hygiene. Keep your risk of fraud low by making these smart habits right now.

1. Make Strong Passwords

The days you could get away with your birthday as your password are over. Fraudsters don’t need to know you or your date of birth to hack this simple password. Most scam artists rely on sophisticated cyphers that run through millions of combinations in seconds, so they can easily crack a short series of numbers.

Security experts recommend making your password a random mixture of letters, numbers, and symbols. Most importantly, your password should exceed 12 digits. A complicated password of this size takes a cypher 34,000 years to hack, so it makes you less of a target.

2. Never Repeat a Password

It’s certainly easier to remember one strong password than 15 unique, strong passwords. But this is a cybersecurity mistake. If one account is compromised in a data breach, this single breach exposes every account that uses the same email and password as its credentials.

3. Don’t Use Free Wi-Fi

Any time you want to apply, manage, or repay your online loan, wait until you are on a secured network that you trust. While free Wi-Fi is a convenient perk of the modern world, it’s rife of security risks. Someone with basic hacking skills can hijack this unprotected network to spy on other users. While there’s a good chance no one is eavesdropping on your local café’s connection, this risk is never zero.

The Takeaway:

Taking out an online line of credit is safe, provided you follow these tips.


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