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Equifax, TransUnion, Credit Karma, Borrowell: Should you trust your credit score? (Marketplace)

Equifax, TransUnion, Credit Karma, Borrowell: Should you trust your credit score? (Marketplace)
♪ ♪ >> Asha: Do you know what

your

credit

score

is? >> Yes, I do. >> It's actually... It's good. >> Asha: Do you want to say it? >> No! It's good! It's a good

credit

score

. It's above average. >> Asha:

Your

credit

score

. It used to be taboo. Now it's out in the open. And how did you find it out? >>

Credit

karma

. I use

Borrowell

, so they send me a monthly report.

Credit

Karma

and

Borrowell

. >> Asha: If those names ring a bell, it's likely because of commercials like these. Seems our

score

will decide our future. >> You know, I'm wondering if now is the right time for us to have a kid. I'm not sure we're ready financially. >> Just check

your

credit

score

for free at

borrowell

.com. >> Yeah! >> Asha: Lenders and landlords use

score

s to help decide how financially risky we are, and what interest rates to charge. So millions of us are signing up to learn our three digit number. But are all

score

s created equal? And just how reliable are they? Our

credit

score

crew is about to test that out. Michael Deng. He's a brand ambassador and goes by his last name only. Kristal Ramroop, a logistics manager with two young kids. And Raman Agarwal. Owns his own company and employs 55 people. >> Asha:

Credit

score

crew. How are you doing? >> Great! Thank you. >> Asha: Why are you three interested in

your

credit

score

s? >> One

should

know how much

score

...
equifax transunion credit karma borrowell should you trust your credit score marketplace
they have. If they are borrowing money from the bank, it is very important to

credit

score

, play a big role. >> This is something close to home for me. I mean, I like being educated on things in life. >> I don't know my

credit

score

. >> Asha: You've never checked

your

credit

score

? >> I'm going in as blind! That's the game plan. >> Asha: We're testing four companies. Two give out a free

score

.

Credit

Karma

, based in the US. And

Borrowell

, a homegrown Canadian company. And we'll test two that charge for a

credit

score

.

Equifax

and TransUnion. >> Asha: Here's the scoop. The higher

your

score

, the higher the chances a lender will loan you cash or give you a

credit

card. It's based on many factors, including whether you pay off bills on time, how much money you owe, how long you've been borrowing, what types of

credit

you have and how often you ask for new

credit

. First up,

Credit

Karma

. >> I got it. >> Asha: You're in? >> I got it. 762. >> Asha: 762 is very good according to

Credit

Karma

. >> Yes, it is. >> Asha: The

karma

's alright with you. >> Yes, it shows my

credit

cards here, too, all my

credit

cards. Everything it shows. >> So, mine's fair, Which I expected. I do keep up with it, because I did file for bankruptcy, so it shows me the information on my bankruptcy and when it will be discharged and closed, which is great. >> Asha: Let's...
equifax transunion credit karma borrowell should you trust your credit score marketplace
see what's going on with Deng. Wow! What? Can you read out

your

score

, please? >> 811. >> Asha: And it says you are... >> Excellent. I think. I'm confused. I don't know. I guess I'm doing something right. >> Asha: Our testers don't just get a

score

here.

Credit

Karma

serves up

credit

cards. >> I'm at 19.97 for a President's Choice card. MasterCard. >> Asha: And you? >> Canadian Tire for a 19.99 percent. >> Asha: And Raman? >> American Express card. It's called Cobalt Card at 19.99 percent interest. >> Asha: So, let me get this straight. You are all being offered the same interest rate, and you have different

credit

score

s across the board. >> Correct. >> It's strange. >> Asha: Does that make sense? >> Not at all. >> Asha: It says right on the site, an offer based on

your

score

. Next up in our test,

Borrowell

, another free

score

. There you go. You're in! >> 637. Wow. What did I do? >> Asha: Raman's stunned. He was just at 762. Now his

score

has dropped 125 points. What happened? >> I have no idea. I have absolutely no idea. >> Asha: And look, on the other

credit

score

,

Credit

Karma

said you were doing very good. >> Correct. >> Asha: Now, you are... >> It's showing I'm below average. I cannot understand this. >> Asha: He's worried because if he wanted a loan, his low

score

could mean a...
equifax transunion credit karma borrowell should you trust your credit score marketplace
higher interest rate. Kristal's

score

tanks, too. By almost 100 points. >> It's a huge difference. It's shocking actually. Say for example you were on

Credit

Karma

and you go in with that

credit

score

thinking, you know, you're doing pretty well and then you try something else out and it's the complete opposite, it's kind of deflating. >> Asha: And Deng is also going downhill. >> I am now an average Ontario person at 770 apparently. >> Asha: I mean, you're still excellent but you're not as excellent as you were with

Credit

Karma

, sorry to say. >> Exactly. So I wonder what I did in the past two minutes to lose it. >> Asha: Check it out.

Borrowell

recommends

credit

cards, and lots of loans, too. And what kind of interest rates are there? >> Well, it says here, it's pretty high, though, Fairstone. I don't know who they are, asking for 26.99 percent interest. >> Asha: And while Kristal has the lowest

score

, she gets the biggest offers. Loans up to 60 grand. That's a lot of money. >> It is. >> Asha: Okay, let's pull out the plastic for the next two

score

s. They cost about 20 bucks. Starting with

Equifax

. >> So you just hit "view my product now"? >> Asha: Kristal's

score

is back up. >> Yeah, well, I feel like

Equifax

, like, you are paying, now you're paying for a product that it

should

be more accurate. >> Asha: Raman's paid...

Equifax

score

is also up. >> Strange. I've got a better

score

here now. What the hell they are showing me a different

score

? >> Asha: And Deng? Keeps on sliding. >> It's about an 80 point difference from what we started with. So I started off my day very well. I had, like, 811 and every little test I did it just went boop, boop, boop. >> Asha: So, what's in store for our final

score

? It's from TransUnion. Do you think this

credit

score

will be better or worse than the others? >> Hard to say. >> Asha: Yeah. >> I don't know. I'm kind of scared. >> Asha: Oh, wow. >> Yeah. So mine went into, ah, very poor on TransUnion. >> Asha: And the grade

score

is F. >> Yeah, it's F. >> Asha: What do you think about that? >> Disappointing. I mean, it's gone, we've gone through four different

credit

sites and I mean nothing is really consistent. >> Asha: But Deng's on the rebound. >> All right, I'm in. >> Asha: Let's see. >> Back up. I am at 7... >> Asha: 98! Good stuff, man! >> Get it! >> Asha: This is looking up. Unlike the free sites, TransUnion and

Equifax

aren't pitching

credit

cards or loans. >> This is more just a plain information. >> Asha: And Raman? He's up by two points. So, here are the final results. Three testers, four companies. Four different

credit

score

s. These roller-coaster results are...
making our testers scratch their heads. >> Does every company have their own formula to it? Or there's one standardized one for everything? >> Asha: We've shared our results with the companies in our test.

Credit

Karma

declines to come on camera and won't comment on our findings. TransUnion and

Equifax

won't give us an interview either. And

Borrowell

? Their CEO, Andrew Graham, is about to step up. >> It really is a confusing and frustrating system in many ways. I'm really sympathetic to that and that's really why we've tried to make it more transparent. So, what we've done is made it possible for consumers to see that information quickly and for free so they can advocate for themselves. >> Asha: But Kristal wonders how she can advocate for herself without knowing which

score

lenders use. >> Do they go based on the free websites that you can access or do they go based on the bigger guys like TransUnion or

Equifax

? >> Asha: Good question. Consumers are wondering what can we

trust

, then? What

score

can we

trust

? Which company is giving us the clearest picture? >> There are many different types of

credit

score

in Canada and they're calculated slightly differently. Every lender will have their own secret sauce for how they make loans, and they may use a different type of

score

. The

score

we give out is a very commonly used

score

. >> Asha: Same deal with

Credit

Karma

,

Equifax

and TransUnion. They...
say their

score

s are used by banks and lenders too. But which ones? They won't tell us. It's time for test number two with our

credit

score

crew. All right. You're going to take these

credit

score

s, we're going to send you off in some real life situations. I will be coming with you but hanging back a little. We'll see what happens. Let's go. We want Deng to find out if he can

score

a set of wheels with his

credit

score

s. Like this

Credit

Karma

commercial suggests. >> Let me hop in and get a feel for it. >> Asha: So, he's meeting with auto sales manager Ronan Frawley. >> I have always wanted a high-end car where I can feel the speed underneath my feet. >> Well, you're in the right place. >> Yeah. I'm just wondering if these would do anything for me? >> These are

credit

score

s you have printed online? >> Yeah, man, these are the free ones. >> Yeah. Okay. These are good to know for

your

self personally, but really they don't bear any weight in terms of an automotive purchase. We're gonna be looking at many other variables including

credit

score

. But from an automotive lender's perspective, this really wouldn't have any impact whatsoever on lending. >> What about the one I pay for on a monthly basis? Does that do anything for me? >> No, not at all. It's not worth the paper it's printed on unfortunately. >> Oh, man. >> Asha: Turns out the car people...
request their own

score

on you which could be different. >> Nothing like the commercial I saw online on

Credit

Karma

, swipe and you get a new car. Swipe and new car. >> Yeah. No, not quite. >> Not quite. >> Asha: So Deng's

score

s don't pass the test drive. But at least he gets to take a car out for a spin. Next up, Kristal and I are in Toronto's Condotown chatting with property manager Sabine el-Ghali. >> For

your

properties when you go to rent them out would these

credit

score

s be something you would consider? >> We don't accept outside

credit

reports. Some people would actually submit these and then I have to tell them I'm sorry I can't accept it. Thank you for submitting it. We have to do it ourselves. >> Asha: Listen up. Sabine's looking for something specific. >> It gives you a number but I don't see it saying a Beacon

score

anywhere on them. >> Asha: Say what? There's something called a Beacon

score

? >> Sometimes when we run it it's even higher than what they presented. >> But not lower? >> We've had lower as well. >> Asha: Okay, then. Kristal's four

score

s don't cut it here. So what's Raman going to hear when he shows his

score

s to mortgage broker, Vince Gaetano? Vince owns monstermortgage.ca. >> Let's take a look at them. Okay. This is a client

score

and not necessarily the same

score

I would secure when I pull my

credit

...
bureau. This is a general

score

. As a mortgage professional I pull a Beacon

score

. That's the

score

our lenders want us to present to them with the mortgage application. >> Asha: It's that Beacon

score

again. It's used by most lenders in Canada. But here's the catch. It's only available to businesses and it's kept secret from you and me. >> All these

score

s that are being provided to consumers free or by paid purposes are not necessarily Beacon

score

s. >> Asha: This is

your

Marketplace

. >> Asha: Three testers, four companies, four different

credit

score

s that don't seem to mean much. >> Why don't we come on in? >> Asha: Thanks to this mortgage broker, Raman's going to find out his secret Beacon

score

. >> Why don't you have a seat? >> Sure. >> Asha: It's risky because a business checking up on him could lower his

score

. But he wants to know, so he's going for it. >> So, Raman? >> Yes. >> I have

your

score

. >> Okay. >> I can't show you the

score

but

your

Beacon

score

is a lot different than any of those four reports you showed me today. >> Let me ask you, is it higher or lower? >> It's extremely higher. >> Oh, my God. >> And you're in the top ten to 15 percentile of Canadians. And I have an obligation to keep the reporting of the

credit

score

private. >> I see. You can't disclose the numbers at all?...
>> I can disclose the number.

Your

credit

score

is 829. >> Oh, my God! >> Asha: Wait. What? That's way higher than all his other

score

s. We take that news to

Borrowell

. One of our testers went to a mortgage broker and had a hard

credit

score

check and it was a Beacon

score

. His Beacon

score

was 829.

Borrowell

's

score

was 637. So the Beacon

score

is almost 200 points higher than the

score

he got from

your

company. Can you explain that? >> There are many different types of

credit

score

in Canada and they are calculated slightly differently. It is a complicated system and we're the first to say it's frustrating for consumers. We didn't build the system. We're trying to help add transparency to it and help consumers navigate it. >> Asha: Then maybe he can help answer this next question. All our testers took their

score

s to a car dealership, a mortgage company, along with a property rental management company. All of them said their

credit

score

s were useless. They couldn't use them, they couldn't run them. What do you make of that? >> If you talk to any lender, any bank that's making lending decisions, they're absolutely using

credit

score

s. >> Asha: So, which

credit

score

are they using? >> There's a variety of

credit

score

s in Canada. The

credit

score

we give is a mainstream

credit

score

used by many of the banks. >> Asha: Mainstream how? If we're being told it's not being...
used, how is it mainstream? >> It's absolutely being used. We're using it for one. I mean, look, the good news is if you are doing things like paying

your

bills on time and not maxing out

your

credit

cards you're gonna see improvements across any kind of

credit

score

you pick. So, I think that's the power here. >> Asha: But who's really got the power? Seems like Americans may have the upper hand. Remember that secret Beacon

score

? It's not a secret in the US. They call it a fico

score

there and consumers can get it easily. And remember those offers coming through the free sites? >> 19.97. >> 26.99 percent interest. >> Up to 59,995. >> Asha:

Borrowell

and

Credit

Karma

get a cut of any offer you are approved for by a loan company and Vince Gaetano has a lot to say about that. >> The end result is you are giving them permission to pull

your

report. And that data is very valuable to lending companies, to marketers, to anyone that needs to sell you financing. >> You have many loan companies out in the

marketplace

that are offering these types of services because they want to market to you at the appropriate time when you're at

your

most vulnerable. >> We show his concerns to

Borrowell

. >> It really doesn't reflect how we run our business. We want to connect people to the best financial products if and when they need them. Many, many, many people that use

Borrowell

have never taken a...
financial product with us and that's totally fine. >> Asha: And get this, if you can find the fine print on

Borrowell

's site, it says their

score

may not be the same

score

used by third parties and is provided to you for educational use. Bet you missed it in the

Credit

Karma

commercials, too. >> The

score

you see on

Credit

Karma

is provided for educational purposes. >> And may be different than the

score

your

lender uses. >> I think they

should

maybe advertise that a bit more, that it's not necessarily the same

score

that other agencies or people pulling their

score

would see. >> Asha: And those TransUnion and

Equifax

score

s you pay for? They're also for educational use. >> What is someone's actual

credit

score

? Who knows that? >> It's hard to fathom that a company would exist to give you a

credit

score

that may not be accurate and may not be completely needed.