Is FICO score used in Canada?
- Asked By
- Updated On:29-Nov-2022
- Replies:1
Short Answer
Does the US-based credit analytics company - Fair Isaac Corporation (FICO) have a base in Canada? Know if FICO score is used in Canada? Yes, FICO score is used in Canada to assess the creditworthiness of a borrower.
Detailed Answer
What is a FICO Score?
The full form of FICO is Fair Isaac Corporation. This software gives the borrowers a 3-digit score after examining their loan repayment history, a mix of loans taken, new loans applied for, the number and value of debts under the borrower’s obligation and the time span of their loan history.
Is FICO score used in Canada?
FICO is a software analytics company that is based in the United States of America and it claims that 90% of Canadian lenders that includes top financial institutions and banks use the FICO score as a tool to evaluate the financial reliability and credit worthiness of a borrower. Reports suggest that FICO has been an intrinsic part of Canada’s lending and borrowing industry.
How does FICO operate in Canada?
FICO has a unique methodology to calculate the credit score of a borrower. This method is patented by the company. FICO sells its technique to the two well-established credit bureaus in Canada – Equifax, and TransUnion. FICO doesn’t do the job of collecting, storing, and sharing the data of Canadian borrowers, whereas its niche is to devise calculation techniques for various sectors such as automobile, mortgage, credit cards etc., It also keeps updating its methodology frequently. FICO established its latest version - FICO Score 10 in Canada in April 2022.
Who can access your score?
The credit bureaus share their information with the following entities:
- Government of Canada
- Employers seeking background checks
- Insurance providers
- Banks
- Financial institutions
- Credit card companies
FICO Score in Canada
It is inferred that FICO score is one of the most trusted tools used by lenders to assess your creditworthiness and it is vital that you make prompt loan repayments in order to maintain a good score. This will help your future loan application and borrowing process uncomplicated. In some instances, the lenders may offer you loans at a lower interest rate as you are deemed to be a less risky and a reliable borrower.
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Discussion (0)
FICO score is an important parameter to check your credit worthiness. According to the findings of Equifax, a FICO score between 660 and 724 is deemed to be good.
In Canada, there are two major credit reporting agencies for consumers: Equifax and TransUnion. For businesses, the most popular credit reporting agency is Dun & Bradstreet.
Credit score and credit report of Borrowell are free. However, Rent advantage and credit builder has subscription cost of $5 and $10 per month respectively.
There are three credit reporting agencies in Canada: Equifax, TransUnion and Dun & Bradstreet. Equifax, TransUnion are for consumers whereas Dun & Bradstreet is for businesses.
You must have a credit score of more than 660 in order to buy a house in Ontario via mortgage application. If you have a score that is less than 660, the banks would deem you not to be creditworthy for lending purpose.
FICO is Fair Isaac Corporation, that gauges your creditworthiness using five major indicators - loan repayment history, current level of debt, length of credit history, blend of loans taken and newly opened credit accounts.
A business credit card is a powerful tool for solving the business and personal financial needs. But a business credit card can affect your personal credit score. It totally depends on how you use it.
Yes, 650 is a good credit score in Canada. Anything below 650 is classified as a fair credit score.
Yes, the credit scores published by Borrowell is accurate and reliable as the company is associated with Equifax and it uses Equifax risk score 2.0. There might be some variances in the score when compared to Equifax as the company's system takes up-to 1 week to update its system.
Yes, we believe that Borrowell is safe to use. We based it from its privacy policy and associate partners.