Credit Score Disclosure

Credit-Scores-MortgagePulling a credit score is one of the first things a mortgage planner does before submitting your application to a lender.

Once the score is obtained, clients often want to know what their score is.  What many don’t realize is that mortgage planners generally can’t tell them.

Equifax, the main credit bureau in Canada, has very strict rules that restrict brokers from disclosing credit scores to borrowers.  Brokers who violate this policy are subject to termination of their license from Equifax—not a good prospect.

Equifax instead suggests that brokers refer borrowers to if they wish to determine their score.  Equifax, of course, charges for providing credit scores.

Despite these rules, mortgage planners are always free to say whether your score qualifies you for the mortgage you request.  If the particular mortgage you desire requires a 680 Beacon score, for example, a mortgage planner is allowed to tell you whether your score is higher or lower than that number.

  1. It must be frustrating to get those questions all the time.
    One great service for consumers, targeted more at investors, that I use is CreditAlert. They notify you every time there’s activity on your file, and the send you a quarterly copy of your credit report and score.

  2. You think it is worth the $20.00 plus taxes you pay them every month, huh ?
    Most of us can live with the free report (and the occasional score). Personally, I paid twice in the past eight years to see the score, but have received over a dozen free reports without the score.
    So, my total cost for keeping an eye on the credit file has been under $50 for eight years. (Credit Alert would have cost me $1920. Ouch !)

  3. Free credit reports are available if you request them in writing. Generally if you want them now online, you need to pay. Offers of free reports online usually involve signing up for a free trial of some sort of credit alert service–some of these are outright scams, some make it difficult to cancel before you are charged for the service.

  4. The two credit reporting agencies in Canada, Transunion Canada and Equifax Canada are not forthcoming about how you obtain your own free credit report (by mail) and purposely make it a convoluted process. Obviously so they can try to hawk their paid services to you.
    Your Transunion credit report can be obtained by mail by going to Transunion’s Canadian website and following the links to consumer disclosure (by mail), filling out the form, enclosing copies of ID and sending it in by snail mail.
    I was just on Equifax’s Canadian website and can’t find their form to download. Maybe someone can help?
    Anthony makes good points about the online free reports. The truly free reports that you are entitled to as per consumer disclosure legistation is by printing off and mailing in the agencies form to them.

  5. One more point … I dont understand how the credit reporting agency can STOP a broker from disclosing information ABOUT ME to ME! Isn’t there laws in this country protecting the consumer and giving them access to information that organizations keep on ourselves? I couldn’t see any court enforcing charges against a broker that disclosed the info to their clients. If I’m wrong please let me know of a legal case.

  6. “I couldn’t see any court enforcing charges against a broker that disclosed the info to their clients.”
    the issue is not legality, its the service contract that the brokers use with the agency’s that prevents them from showing the report to the client. because, as was mentioned, the agency’s would rather sell the client their own info instead of having the broker give it away for free.

  7. “the issue is not legality, its the service contract that the brokers use”
    Yeah, that “service contract” is a legal matter – that’s why it’s called a “contract”. The credit agency will NEVER know if the report is disclosed to the broker’s client, so if there is no legal punishment then why would a broker even make an issue of this? It sounds to me like a complete crock if you ask me OR ask most consumers.

  8. To Homeowner:
    The agency isn’t going to sue a broker for disclosing the report, even though you are right, that breach of contract is a legal issue. Instead, they will just cut them off from acsessing ANY of their information!
    I can imagine it would be pretty hard to be a broker if you can’t obtain clients credit reports.
    Again, I’m not saying its not done, or that it wouldn’t be hard for the agency to find out a broker was doing this. But, if the agency found out, it would pretty much be the end of a brokers use of their services.

  9. Aside from not discussing the actual score itself, what can you discuss with a client if they are asking for help in improving their credit to purchase at a future date?

  10. Make sure you photocopy both sides of your ID when you send in your paper request forms. I’ve been burned that way before, and wasted a month or more.

  11. It is interesting to look at the differences between the Equifax Consumer disclosure rules for Beacon scores between Equifax USA & Equifax Canada. When a Canadian mtg. agent/broker requests a USA Equifax credit bureau, THERE IS an obligation to disclose the Beacon score to a consumer under the FACT Act, Fair and Accurate Credit Transactions Act (U.S.)
    A mtg. agent/broker must provide various consumer information including:
    1. The consumer’s current credit score or most recent credit score;
    2. The range of possible credit scores under the model used;
    3. Up to the top 4 key factors/reason codes, plus information that inquiries may have had an adverse affect on the score if this information was not included in the top four key factors;
    4. The date on which credit score was created;
    5. The name of the person or entity that provided the credit score or credit file upon which the credit score was created.
    When a mtg. agent/broker requests a Canadian credit bureau from Equifax, we are not to disclose or provide to the subject (consumer) the actual Beacon score, nor specifically state that a credit risk prediction model was used.
    I wonder if there is legislation afoot to change the consumer credit disclosure process in Canada, so a consumer does not have to pay Equifax $20 in order to obtain their Beacon score in this increasingly Beacon driven lending environment?

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