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The PRO Files: What Photographers Need To Know About The Equifax Hack

What’s the only thing worse than finding out that your personal information was compromised in the recent hack of the credit bureau, Equifax? Learning that the released information puts your business at risk as well. Too many professional photographers have not done the due diligence to ensure that their personal finances are separate from their business. In those cases any threat to the photographer’s personal finance is a threat to the business as well. Here’s a guide to navigating the personal and professional consequences of the Equifax debacle as well as what you can do to protect your business going forward. 

The Hack: What Happened

Consumer credit reporting agency Equifax recently revealed that it was the subject of an extensive hack and that significant personal information for more than 143 million people was compromised. Not only does that represent the largest breach of consumer information in U.S. history, but also because of the nature of the organization, the information released is particularly sensitive—comprising the entire credit histories of those in its database. “Lots of people are justifiably concerned about this hack,” writes technology analyst Avivah Litan on the Gartner Research blog, "and it is in my estimation the worst ever in terms of sensitive confidential consumer/personal information leaked.

How Will The Equifax Hack Affect Your Photography Business?

If you’ve set up your business in the proper way, the good news is that there’s essentially no risk to your business. A business can have a credit rating just like an individual, but Equifax does not hold business credit information—only personal. Instead, a company called Dun and Bradstreet serves as the primary clearinghouse for businesses credit information. If you want to establish a business line of credit the first step is to contact Dun and Bradstreet to sign up for a DUNs number—that’s a nine-digit identifier that opens your business’s file in the Dun and Bradstreet database. But you can’t do that if you haven’t first properly set up your business.

The danger from Equifax’s release of personal information comes when a business owner's personal finances and company finances are intermingled. Too many professional photographers are sole proprietors; they have not put in place the barriers that keep their personal assets separate from those of their business. Imagine if a compromise to your personal credit prevented you from financing your next big camera purchase. Crippling your business due to personal credit issues is no joke.

Photographer and business expert Rosh Sillars says the first thing he did when he started his business was to file articles of incorporation. An LLC may be fine for most photographers, he says, but checking with an accountant is always the best idea. “I recommend to all photographers who wish to make photography a business,” he says, “incorporate to protect yourself. Make sure to keep your personal and business accounts separate.”

In order to minimize the dual risks to business and personal assets, photographers are best served by establishing a legal business entity—filing the paperwork with their state government to incorporate as an S-corporation, a C-corporation or an LLC. (LLCs may establish S-corp or C-corp designations for tax purposes as well.) All offer the primary benefit of protecting a business owner’s personal assets from the fates of their businesses, and vice versa. It behooves any entrepreneur to consult with an accountant or business advisor to determine the status that is most appropriate for his or her business, but establishing a Limited Liability Company, or LLC, is a great way to separate business and personal assets while offering an easy and affordable setup process ideal for sole proprietor photographers. Sites such as Legal Zoom, BizFilings and Incorporate.com make filing the articles of organization for an LLC quick and easy.

Setting up a corporation may be a bit more involved, but still totally affordable in the grand scheme of business expenses and a fraction of what’s at risk with commingled finances. Both S-corps and C-corps provide asset protection, which will provide the peace of mind that your business is not at risk when the next major “national news” style data breach occurs. Incorporating can offer significant tax benefits too. Advertising and editorial photographer Jay Fram says his accountant advised him to incorporate as an S-corporation.

“If you’re incorporated you do not pay self-employment tax,” Fram says, “which can be high. People talk about getting taxed twice as sole proprietors; my understanding is that I save significant tax money compared to being a sole proprietor. My accountant suggested it as a way to save on taxes and shield myself from certain kinds of liability. I pay quarterly taxes and distribute a letter to ‘shareholders,’ which is myself.”

Austin-based advertising and stock photographer Inti St. Clair agrees. “I incorporated to reduce my overall tax liability,” she says, “and to protect my personal assets in case of some sort of lawsuit. My accountant convinced me to do S-corp over LLC. I did it in Washington and, if memory serves me well, it was a simple form and a $75 fee.”

Protecting Your Credit

If your bank or mortgage lender inadvertently released your sensitive personal information you would have more options for recourse and protection. You could, for instance, simply close those accounts and take your business elsewhere. But because Equifax is one of the big three consumer credit reporting agencies, it acts as a clearinghouse any time an entity wants to check your credit. This occurs when you apply for credit of any sort—car loan, home loan, store credit—as well as when you apply for a new job or try to rent an apartment. You never signed up for Equifax, or its counterparts Experian and TransUnion, so you can’t take your business elsewhere. But what you can do is take steps to protect from the impact of the personal information that was compromised. 

In the wake of the data breach, Equifax has established a website dedicated to providing information and services for determining your own exposure and in taking steps to help prevent damage to your credit rating and theft of your identity. At the website www.equifaxsecurity2017.com, you can enter the last six digits of your social security number to determine if the company believes your data was compromised. But let’s be clear: if you’ve ever applied for a credit card or car loan, or opened a bank account or signed up for cell phone service, or if you have utilities serving your residence or if you’ve ever rented an apartment or… Get the picture? Information on nearly half of all Americans is included in the files. If you have a credit card or a credit score, this affects you. 

First, check your credit score. This will provide a baseline against which you can measure any future activity—keeping an eye out for the funny stuff. You don’t have to use one of those often-advertised services to get your credit report, either. Some of them have fees; some of them want access to your info. Either way, there’s another option. The federal government says you’re entitled to check your credit score at no charge once per year, and the only site sanctioned to do that is www.annualcreditreport.com. It’s a little busy right now, but keep trying until you get that report. While you’re at it, you may see some things you can do to improve your credit score right now—like correcting errant information. 

Next, consider enrolling in credit monitoring. Equifax is offering the service free for one year for those who are impacted by their security breach. The company initially required those enrolling to sign away rights to future legal action, but after intense public outcry that requirement has been removed. Signup for the company’s monitoring and theft protection service at https://trustedidpremier.com/eligibility/eligibility.html. Bear in mind that as just one of the big three credit bureaus, you should also consider signing up for credit monitoring from Experian and Transunion as well, as potential business partners may use one of those services for credit checks instead. 

That same three-pronged approach also applies if you’d like to take the next step and actually freeze your credit. This doesn’t impact your ability to use current lines of credit, but it does prevent anyone from even checking your credit, much less applying for credit in your name. A credit freeze is actually the best method for preventing credit hijinks, but it does come with some hassles of its own. First, depending on your state of residence there may be a small fee attached. Commonly just a few dollars, these credit freezes can be instituted online right from the homepage of each credit bureau. (Given the immense interest in this service at the moment, you may find better success via telephone. The number for Equifax is 800.349.9960, Experian is 888.397.3742 and TransUnion is 888.909.8872.)  If you’ve already been the victim of credit fraud, there is no charge for placing a freeze on your file. Either way, you will choose (or be assigned) a PIN number that will be required to thaw your credit should you so decide down the road. It can also be used to allow individual entities to check your credit without lifting the entirety of the freeze.

You may, instead, prefer to place a fraud alert on your account with each agency. The good news is that by placing the alert with one agency it will (eventually) migrate to the others as well. The bad news is it’s not the same level of defense as a credit freeze. A fraud alert simply makes it harder to open new accounts in your name rather than strictly preventing credit checks. But until the ramifications start to become clearer, this fraud alert might be enough to help you sleep well at night.

About the author:

William Sawalich made his first darkroom print at age ten. He earned a Master's Degree from The Brooks Institute of Photography in Santa Barbara, California. Along with portraiture, still life and assignment photography, Sawalich is an avid writer. He has written hundreds of equipment reviews, how-to articles and profiles of world-class photographers. He heads up the photo department at Barlow Productions in St. Louis.