We did a short piece about Beacon scores on the Toronto Star’s “New in Homes” site this weekend. (Don’t mind the picture!)
If you have a mortgage question you’d like answered on New in Homes, email email@example.com.
Congrats on the coverage. Good looking couple!
Thanks FT, Tres kind!
The problem with Beacon Scores (and TransUnion credit scores as well) is that they are fundamentally flawed in that they do not fairly represent homeowner credit as they don’t incuded mortgage debt (in the main). This means that the average credit score for a homeowner is lower than it ought to be if it actually included the loan most likely to be paid on time – the mortgage.
Actually, a mortgage trade line is included with your credit bureau if the lender happens to report it. The issue is that very few lenders report mortgages to the bureaus. If they do, it is represented as a M1-M9 rating – as opposed to the usual R1-R9 (for revolving credit) or I1-I9 (for instalment loans). I know my mortgage shows up on the bureau.
Although to be honest, I don’t actually know if it is included in the calulation of my credit score, or if any creditor can see that particular trade line? I know I see it if I pull my own bureau, so I have to assume creditors can see it too.
I’ve never seen a Canadian mortgage lender include it on a bureau. What lender has your mortgage and is reporting it?
Thanks for the comments everyone. Reporting mortgages to the credit bureau is relatively new. Not a lot of lenders do it. When reported, mortgages are, in fact, visible to other lenders. And yes, they are used to calculate one’s credit score.
Interestingly, despite mortgages being such an important trade line, they are still reportedly weighted the same as any other trade line (like a credit card).
Rob, Ed. CMT
In Canada, it is my understanding that only Credit Unions report mortgages to the bureaus.
Congratulations on the coverage. Nice picture too!
Hi Kristina: BMO says it reports to the bureau and I know of a few banks who report HELOCs (home equity lines of credit) to the bureaus. I’ve contacted folks at each bank for a more comprehensive answer about their reporting. I’ll try to post something soon. Rob
Hi CC: Thanks a bunch and continued great work over at Canadian Capitalist!
Hi Kristina, I am an LP with Mortgage Architects and I just reviewed a few recent clients files who were previously with Credit Unions to see if all of these CUs report Mortgage debt (Amortizing Mtg debt not LOCs) to the credit bureau(s). The short answer is, some do and some don’t…
List of CUs that I have found that report: Vancity, Westminster CU, Kootenay Savings CU Vancouver Savings CU, Calgary Savings CU.
Currently most of the national mtg lenders do not report mortgage debt to the credit bureaus.
Here are the few that to the best of my knowledge do report to the credit bureau: BMO, Citizens bank (owned by a credit union “ Vancity”), Citi Financial.
However, most of the national mtg lenders and provincially constrained (eg. Credit Unions) report their “Secured lines of Credit” to the credit bureaus TD, CIBC, Scotia, HSBC, RBC, BMO.
I have found that the lenders that have a combination of secured LOC and amortizing mortgage usually do not report these to the credit bureau. (eg. FLM – matrix mtg, Scotia STEP, Nat Bnk – One.
Hope this helps – I have checked clients credit bureaus for evidence of reporting so I am reasonably confident that the above is accurate, however lenders change policy often and this info may be out of date (even if some of my references were from last week).
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