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>> 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 scores 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 scores 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
scores?
>> One should know how much score 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 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 scores 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 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
scores.
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 scores.
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 scores 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 scores, 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 scores.
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 scores you have printed online?
>> Yeah, man, these are the free ones.
>> Yeah.
Okay.
These are good to know for yourself 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 scores 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 scores 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 scores don't cut it here.
So what's Raman going to hear when he shows his scores 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 scores that are being provided to consumers free
or by paid purposes are not necessarily Beacon scores.
>> Asha: This is your Marketplace.
[ ♪♪ ]
>> Asha: Three testers, four companies, four different credit
scores 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 scores.
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 scores to a car dealership, a
mortgage company, along with a property rental management
company.
All of them said their credit scores 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 scores.
>> Asha: So, which credit score are they using?
>> There's a variety of credit scores 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.
[Laughter]
>> 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 scores 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.
[ ♪♪ ]