June 23rd, 2024

Equifax Canada exploring use of payday loan data in credit score calculation

By The Canadian Press on May 17, 2024.

Equifax Canada says it's exploring how using payday loan data could affect people's credit scores. Signage is seen at the corporate headquarters of Equifax Inc. in Atlanta, Saturday, July 21, 2012. THE CANADIAN PRESS/AP-Mike Stewart

TORONTO – Equifax Canada says it’s exploring how using payday loan data could affect people’s credit scores.

The agency says including data sources that aren’t traditionally used to calculate credit scores could help paint a more complete picture of consumers’ credit health.

Equifax says this could improve credit scores for consumers with “responsive repayment of payday loans,” potentially leading to better loan terms and interest rates for those customers as they seek to rebuild their credit.

Last month, Equifax said it was exploring the use of rental data in calculating credit scores, adding that including “alternative data” could establish or enhance the credit scores for millions of Canadians.

The federal budget called on banks, fintechs and credit bureaus to prioritize launching tools that would allow renters to opt in to reporting their rent payment history.

The government says this could help more renters become homeowners by strengthening their credit scores if they have a history of on-time rental payments.

This report by The Canadian Press was first published May 17, 2024.

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