🔍
Equifax, TransUnion, Credit Karma, Borrowell: Should you trust your credit score? (Marketplace) - YouTube
Channel: CBC News
[0]
♪ ♪
[4]
>> Asha: Do you know
what your credit score is?
[5]
>> Yes, I do.
>> It's actually...
[7]
It's good.
>> Asha: Do you want to say it?
[9]
>> No!
[11]
It's good!
[12]
It's a good credit score.
[13]
It's above average.
[14]
>> Asha: Your credit score.
[16]
It used to be taboo.
[17]
Now it's out in the open.
[19]
And how did you find it out?
[20]
>> Credit karma.
[21]
I use Borrowell, so they
send me a monthly report.
[23]
Credit Karma and Borrowell.
[26]
>> Asha: If those names ring a
bell, it's likely because of
[31]
commercials like these.
[35]
Seems our score will
decide our future.
[38]
>> You know, I'm wondering if
now is the right time for us to
[40]
have a kid.
[42]
I'm not sure we're
ready financially.
[44]
>> Just check your credit
score for free at borrowell.com.
[46]
>> Yeah!
[49]
>> Asha: Lenders and landlords
use scores to help decide how
[52]
financially risky we are, and
what interest rates to charge.
[56]
So millions of us are signing up
to learn our three digit number.
[62]
But are all
scores created equal?
[65]
And just how reliable are they?
[69]
Our credit score crew is
about to test that out.
[74]
Michael Deng.
[75]
He's a brand ambassador and
goes by his last name only.
[79]
Kristal Ramroop, a logistics
manager with two young kids.
[83]
And Raman Agarwal.
[84]
Owns his own company
and employs 55 people.
[89]
>> Asha: Credit score crew.
[90]
How are you doing?
[91]
>> Great!
Thank you.
[92]
>> Asha: Why are you three
interested in your credit
[95]
scores?
[96]
>> One should know how
much score they have.
[98]
If they are borrowing money from
the bank, it is very important
[100]
to credit score,
play a big role.
[102]
>> This is something
close to home for me.
[104]
I mean, I like being
educated on things in life.
[107]
>> I don't know my credit score.
[108]
>> Asha: You've never
checked your credit score?
[110]
>> I'm going in as blind!
[111]
That's the game plan.
[114]
>> Asha: We're
testing four companies.
[116]
Two give out a free score.
[118]
Credit Karma, based in the US.
[121]
And Borrowell, a
homegrown Canadian company.
[124]
And we'll test two that
charge for a credit score.
[127]
Equifax and TransUnion.
[132]
>> Asha: Here's the scoop.
[133]
The higher your score, the
higher the chances a lender will
[136]
loan you cash or
give you a credit card.
[138]
It's based on many factors,
including whether you pay off
[142]
bills on time, how much money
you owe, how long you've been
[145]
borrowing, what types of credit
you have and how often you ask
[149]
for new credit.
[153]
First up, Credit Karma.
[156]
>> I got it.
>> Asha: You're in?
[158]
>> I got it.
762.
[160]
>> Asha: 762 is very good
according to Credit Karma.
[162]
>> Yes, it is.
[163]
>> Asha: The
karma's alright with you.
[165]
>> Yes, it shows my credit cards
here, too, all my credit cards.
[167]
Everything it shows.
[168]
>> So, mine's fair,
Which I expected.
[171]
I do keep up with it, because I
did file for bankruptcy, so it
[175]
shows me the information on my
bankruptcy and when it will be
[178]
discharged and
closed, which is great.
[181]
>> Asha: Let's see
what's going on with Deng.
[184]
Wow!
What?
[185]
Can you read out
your score, please?
[188]
>> 811.
[190]
>> Asha: And it says you are...
[191]
>> Excellent.
[193]
I think.
I'm confused.
[194]
I don't know.
[196]
I guess I'm doing
something right.
[198]
>> Asha: Our testers
don't just get a score here.
[201]
Credit Karma
serves up credit cards.
[204]
>> I'm at 19.97 for a
President's Choice card.
[208]
MasterCard.
[210]
>> Asha: And you?
[211]
>> Canadian Tire
for a 19.99 percent.
[215]
>> Asha: And Raman?
[216]
>> American Express card.
[218]
It's called Cobalt Card
at 19.99 percent interest.
[221]
>> Asha: So, let me
get this straight.
[223]
You are all being offered the
same interest rate, and you have
[227]
different credit
scores across the board.
[229]
>> Correct.
[230]
>> It's strange.
>> Asha: Does that make sense?
[231]
>> Not at all.
[234]
>> Asha: It says right on the
site, an offer based on your
[238]
score.
[241]
Next up in our test,
Borrowell, another free score.
[245]
There you go.
[246]
You're in!
[248]
>> 637.
[250]
Wow.
[251]
What did I do?
[253]
>> Asha: Raman's stunned.
[254]
He was just at 762.
[257]
Now his score has
dropped 125 points.
[260]
What happened?
[261]
>> I have no idea.
[263]
I have absolutely no idea.
[265]
>> Asha: And look, on the other
credit score, Credit Karma said
[268]
you were doing very good.
[269]
>> Correct.
>> Asha: Now, you are...
[271]
>> It's showing
I'm below average.
[273]
I cannot understand this.
[276]
>> Asha: He's worried because if
he wanted a loan, his low score
[279]
could mean a
higher interest rate.
[282]
Kristal's score tanks, too.
[284]
By almost 100 points.
[286]
>> It's a huge difference.
It's shocking actually.
[288]
Say for example you were on
Credit Karma and you go in with
[292]
that credit score thinking, you
know, you're doing pretty well
[294]
and then you try something
else out and it's the complete
[297]
opposite, it's
kind of deflating.
[302]
>> Asha: And Deng is
also going downhill.
[304]
>> I am now an average Ontario
person at 770 apparently.
[310]
>> Asha: I mean, you're still
excellent but you're not as
[311]
excellent as you were with
Credit Karma, sorry to say.
[314]
>> Exactly.
[315]
So I wonder what I did in the
past two minutes to lose it.
[318]
>> Asha: Check it out.
[320]
Borrowell recommends credit
cards, and lots of loans, too.
[323]
And what kind of
interest rates are there?
[325]
>> Well, it says here, it's
pretty high, though, Fairstone.
[328]
I don't know who they are,
asking for 26.99 percent
[331]
interest.
[333]
>> Asha: And while Kristal has
the lowest score, she gets the
[335]
biggest offers.
[337]
Loans up to 60 grand.
[339]
That's a lot of money.
[341]
>> It is.
[343]
>> Asha: Okay, let's pull out
the plastic for the next two
[345]
scores.
[347]
They cost about 20 bucks.
[349]
Starting with Equifax.
[351]
>> So you just hit
"view my product now"?
[354]
>> Asha: Kristal's
score is back up.
[357]
>> Yeah, well, I feel like
Equifax, like, you are paying,
[361]
now you're paying for a product
that it should be more accurate.
[365]
>> Asha: Raman's paid
Equifax score is also up.
[367]
>> Strange.
[369]
I've got a better
score here now.
[371]
What the hell they are
showing me a different score?
[373]
>> Asha: And Deng?
Keeps on sliding.
[376]
>> It's about an 80 point
difference from what we started
[378]
with.
[380]
So I started off
my day very well.
[381]
I had, like, 811 and every
little test I did it just went
[383]
boop, boop, boop.
[386]
>> Asha: So, what's in
store for our final score?
[388]
It's from TransUnion.
[391]
Do you think this credit score
will be better or worse than the
[394]
others?
[395]
>> Hard to say.
[397]
>> Asha: Yeah.
[398]
>> I don't know.
I'm kind of scared.
[399]
>> Asha: Oh, wow.
>> Yeah.
[402]
So mine went into, ah,
very poor on TransUnion.
[406]
>> Asha: And the
grade score is F.
[409]
>> Yeah, it's F.
[411]
>> Asha: What do
you think about that?
[414]
>> Disappointing.
[416]
I mean, it's gone, we've gone
through four different credit
[419]
sites and I mean
nothing is really consistent.
[425]
>> Asha: But
Deng's on the rebound.
[428]
>> All right, I'm in.
[431]
>> Asha: Let's see.
[432]
>> Back up.
I am at 7...
[434]
>> Asha: 98!
[436]
Good stuff, man!
[438]
>> Get it!
[439]
>> Asha: This is looking up.
[441]
Unlike the free sites,
TransUnion and Equifax aren't
[443]
pitching credit cards or loans.
[447]
>> This is more just
a plain information.
[450]
>> Asha: And Raman?
[451]
He's up by two points.
[454]
So, here are the final results.
[457]
Three testers,
four companies.
[459]
Four different credit scores.
[463]
These roller-coaster results are
making our testers scratch their
[466]
heads.
[467]
>> Does every company have
their own formula to it?
[470]
Or there's one
standardized one for everything?
[475]
>> Asha: We've shared our
results with the companies in
[476]
our test.
[478]
Credit Karma declines to come on
camera and won't comment on our
[481]
findings.
[482]
TransUnion and Equifax won't
give us an interview either.
[485]
And Borrowell?
[487]
Their CEO, Andrew
Graham, is about to step up.
[492]
[ ♪♪ ]
[495]
>> It really is a confusing and
frustrating system in many ways.
[498]
I'm really sympathetic to
that and that's really why we've
[501]
tried to make it
more transparent.
[503]
So, what we've done is made it
possible for consumers to see
[506]
that information quickly and for
free so they can advocate for
[510]
themselves.
[511]
>> Asha: But Kristal wonders
how she can advocate for herself
[514]
without knowing
which score lenders use.
[517]
>> Do they go based on the free
websites that you can access or
[522]
do they go based on the bigger
guys like TransUnion or Equifax?
[527]
>> Asha: Good question.
[529]
Consumers are wondering
what can we trust, then?
[531]
What score can we trust?
[533]
Which company is giving
us the clearest picture?
[535]
>> There are many different
types of credit score in Canada
[538]
and they're calculated
slightly differently.
[541]
Every lender will have their own
secret sauce for how they make
[544]
loans, and they may use a
different type of score.
[546]
The score we give out is a
very commonly used score.
[549]
>> Asha: Same deal with Credit
Karma, Equifax and TransUnion.
[552]
They say their scores are
used by banks and lenders too.
[555]
But which ones?
[556]
They won't tell us.
[559]
It's time for test number two
with our credit score crew.
[566]
All right.
[567]
You're going to take these
credit scores, we're going to
[570]
send you off in some
real life situations.
[572]
I will be coming with you
but hanging back a little.
[574]
We'll see what happens.
[576]
Let's go.
[584]
We want Deng to find out
if he can score a set of wheels
[587]
with his credit scores.
[589]
Like this Credit Karma
commercial suggests.
[594]
>> Let me hop in and
get a feel for it.
[597]
>> Asha: So, he's meeting
with auto sales manager Ronan
[599]
Frawley.
[602]
>> I have always wanted a
high-end car where I can feel
[605]
the speed underneath my feet.
[607]
>> Well, you're in
the right place.
[608]
>> Yeah.
[609]
I'm just wondering if these
would do anything for me?
[612]
>> These are credit scores
you have printed online?
[614]
>> Yeah, man, these
are the free ones.
[615]
>> Yeah.
[617]
Okay.
[618]
These are good to know for
yourself personally, but really
[620]
they don't bear any weight in
terms of an automotive purchase.
[623]
We're gonna be looking at many
other variables including credit
[626]
score.
[627]
But from an automotive lender's
perspective, this really
[629]
wouldn't have any impact
whatsoever on lending.
[631]
>> What about the one I
pay for on a monthly basis?
[633]
Does that do anything for me?
[635]
>> No, not at all.
[636]
It's not worth the paper
it's printed on unfortunately.
[638]
>> Oh, man.
[640]
>> Asha: Turns out the car
people request their own score
[642]
on you which could be different.
[645]
>> Nothing like the commercial
I saw online on Credit Karma,
[647]
swipe and you get a new car.
[649]
Swipe and new car.
[650]
>> Yeah.
No, not quite.
[653]
>> Not quite.
[654]
>> Asha: So Deng's scores
don't pass the test drive.
[658]
But at least he gets to
take a car out for a spin.
[669]
Next up, Kristal and
I are in Toronto's Condotown
[673]
chatting with property
manager Sabine el-Ghali.
[676]
>> For your properties when you
go to rent them out would these
[678]
credit scores be
something you would consider?
[682]
>> We don't accept
outside credit reports.
[684]
Some people would actually
submit these and then I have to
[687]
tell them I'm sorry
I can't accept it.
[688]
Thank you for submitting it.
[689]
We have to do it ourselves.
[691]
>> Asha: Listen up.
[692]
Sabine's looking for
something specific.
[695]
>> It gives you a number but I
don't see it saying a Beacon
[699]
score anywhere on them.
[700]
>> Asha: Say what?
[702]
There's something
called a Beacon score?
[704]
>> Sometimes when we run it
it's even higher than what they
[707]
presented.
[708]
>> But not lower?
[710]
>> We've had lower as well.
[711]
>> Asha: Okay, then.
[713]
Kristal's four
scores don't cut it here.
[719]
So what's Raman going to hear
when he shows his scores to
[722]
mortgage broker, Vince Gaetano?
[724]
Vince owns monstermortgage.ca.
[727]
>> Let's take a look at them.
[728]
Okay.
[730]
This is a client score and not
necessarily the same score I
[734]
would secure when I
pull my credit bureau.
[737]
This is a general score.
[739]
As a mortgage professional
I pull a Beacon score.
[741]
That's the score our lenders
want us to present to them with
[745]
the mortgage application.
[747]
>> Asha: It's that
Beacon score again.
[750]
It's used by most
lenders in Canada.
[752]
But here's the catch.
[754]
It's only available to
businesses and it's kept secret
[757]
from you and me.
[759]
>> All these scores that are
being provided to consumers free
[762]
or by paid purposes are not
necessarily Beacon scores.
[770]
>> Asha: This is
your Marketplace.
[771]
[ ♪♪ ]
[777]
>> Asha: Three testers, four
companies, four different credit
[780]
scores that don't
seem to mean much.
[785]
>> Why don't we come on in?
[787]
>> Asha: Thanks to this mortgage
broker, Raman's going to find
[790]
out his secret Beacon score.
[792]
>> Why don't you have a seat?
[793]
>> Sure.
[795]
>> Asha: It's risky because a
business checking up on him
[796]
could lower his score.
[801]
But he wants to know,
so he's going for it.
[803]
>> So, Raman?
>> Yes.
[805]
>> I have your score.
>> Okay.
[806]
>> I can't show you the score
but your Beacon score is a lot
[810]
different than any of those four
reports you showed me today.
[815]
>> Let me ask you, is
it higher or lower?
[817]
>> It's extremely higher.
[818]
>> Oh, my God.
[820]
>> And you're in the top ten
to 15 percentile of Canadians.
[824]
And I have an obligation to
keep the reporting of the credit
[828]
score private.
>> I see.
[830]
You can't disclose
the numbers at all?
[831]
>> I can disclose the number.
[832]
Your credit score is 829.
[834]
>> Oh, my God!
[836]
>> Asha: Wait.
What?
[837]
That's way higher than
all his other scores.
[841]
We take that news to Borrowell.
[843]
One of our testers went to a
mortgage broker and had a hard
[847]
credit score check and
it was a Beacon score.
[851]
His Beacon score was 829.
[854]
Borrowell's score was 637.
[858]
So the Beacon score is almost
200 points higher than the score
[862]
he got from your company.
[864]
Can you explain that?
[865]
>> There are many different
types of credit score in Canada
[868]
and they are calculated
slightly differently.
[871]
It is a complicated system
and we're the first to say it's
[874]
frustrating for consumers.
[876]
We didn't build the system.
[877]
We're trying to help add
transparency to it and help
[880]
consumers navigate it.
[881]
>> Asha: Then maybe he can
help answer this next question.
[884]
All our testers took their
scores to a car dealership, a
[889]
mortgage company, along with
a property rental management
[892]
company.
[894]
All of them said their
credit scores were useless.
[896]
They couldn't use them,
they couldn't run them.
[899]
What do you make of that?
[901]
>> If you talk to any lender,
any bank that's making lending
[905]
decisions, they're
absolutely using credit scores.
[908]
>> Asha: So, which
credit score are they using?
[910]
>> There's a variety of
credit scores in Canada.
[913]
The credit score we give is a
mainstream credit score used by
[915]
many of the banks.
[917]
>> Asha: Mainstream how?
[918]
If we're being told it's
not being used, how is it
[920]
mainstream?
[922]
>> It's absolutely being used.
We're using it for one.
[923]
I mean, look, the good news is
if you are doing things like
[926]
paying your bills on time and
not maxing out your credit cards
[929]
you're gonna see improvements
across any kind of credit score
[932]
you pick.
[933]
So, I think
that's the power here.
[935]
[ ♪♪ ]
[938]
>> Asha: But who's
really got the power?
[940]
Seems like Americans
may have the upper hand.
[943]
Remember that
secret Beacon score?
[945]
It's not a secret in the US.
[947]
They call it a fico score there
and consumers can get it easily.
[952]
And remember those offers
coming through the free sites?
[955]
>> 19.97.
[958]
>> 26.99 percent interest.
[959]
>> Up to 59,995.
[963]
>> Asha: Borrowell and Credit
Karma get a cut of any offer you
[966]
are approved for by a loan
company and Vince Gaetano has a
[969]
lot to say about that.
[971]
>> The end result is you are
giving them permission to pull
[974]
your report.
[976]
And that data is very valuable
to lending companies, to
[981]
marketers, to anyone that
needs to sell you financing.
[985]
>> You have many loan companies
out in the marketplace that are
[989]
offering these types of services
because they want to market to
[992]
you at the appropriate time when
you're at your most vulnerable.
[996]
>> We show his
concerns to Borrowell.
[999]
>> It really doesn't
reflect how we run our business.
[1001]
We want to connect people to the
best financial products if and
[1004]
when they need them.
[1005]
Many, many, many people that
use Borrowell have never taken a
[1008]
financial product with us
and that's totally fine.
[1011]
>> Asha: And get this, if
you can find the fine print on
[1015]
Borrowell's site, it says their
score may not be the same score
[1018]
used by third parties and is
provided to you for educational
[1023]
use.
[1027]
Bet you missed it in the
Credit Karma commercials, too.
[1029]
>> The score you see on
Credit Karma is provided for
[1032]
educational purposes.
[1034]
>> And may be different than
the score your lender uses.
[1040]
[Laughter]
[1041]
>> I think they should maybe
advertise that a bit more, that
[1043]
it's not necessarily the same
score that other agencies or
[1047]
people pulling
their score would see.
[1049]
>> Asha: And those TransUnion
and Equifax scores you pay for?
[1052]
They're also for
educational use.
[1055]
>> What is someone's
actual credit score?
[1057]
Who knows that?
[1059]
>> It's hard to fathom that a
company would exist to give you
[1061]
a credit score that may not
be accurate and may not be
[1063]
completely needed.
[1066]
[ ♪♪ ]
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