Last updated on March 16th, 2020 at 08:56 am
Borrowell, Credit Karma and Mogo are three of the best Fin-tech companies offering free credit scores and reports to Canadians. The credit scores offered on these platforms are obtained from Equifax and TransUnion. If you want to directly get your scores from Equifax or TransUnion you’ll have to shell out almost $20 per month to access your credit score and reports. But is there a catch here? Why are these scores even FREE? Should you be concerned or cautious before using these platforms? Let me try to address these concerns here.
With that said, the most important thing you need to know here is – your credit scores vary across the different platforms and it is not consistent. Now, why is that so?
For example, your score might be 740 in Credit Karma and 720 in Borrowell. That does not mean that 740 is wrong or inaccurate. It is just that each of these free credit score companies has different scoring models (formulas and algorithms to calculate your individual scores) at any given point.
Remember the days when all roads led to the doorstep of the credit unions for all credit-related queries? It seems so long ago now. No longer do people have to pay $20 or more every single time they want to check their credit score.
Thanks to innovation in the Fin-tech industry, TransUnion and Equifax have ceded their monopoly on these services. Today digitally-focused financial institutions offer credit score checks and credit reports for free. They also go-ahead to send your update report to you on a monthly basis at no cost.
Why Knowing Your Credit Score Is So Important In Canada or Any Of The Tier-1 Countries?
Let me keep it simple here, Credit scores are one of the most important parameters that represent you as an individual. You may be making a decent income at the end of the day, but not having a good credit score and a credit file might ruin your case to get a mortgage, worst still you’ll end up paying higher interest rates than a person making half your income.
It’s more to do with how well organized you are with your finances, how disciplined you have been in making bill payments on time in the past (payment history) and the overall financial health of you.
Say, for example, you want to purchase a property tomorrow. Your credit file is definitely pulled and looked upon by the lender. Be it from Equifax or TransUnion. If your credit score is bad in one to say Equifax, it’ll mostly be the same in the other as well. Your score will not be 550 in one and 750 in the other. That’s impossible.
Now, then the mortgage is a big term, credit scores impact your interest fees and rates from the banks, renting a new apartment or even getting a simple cellular phone connection or cable tv. If your credit file is good, it leads to peace of mind, better overall increases in – credit limits (credit cards), better mortgage rates, Line Of Credit applications (LOC), Personal Loans, Car Loans etc.
If you have better credit limits, your credit score, in turn, will not be impacted much even if you make a large purchase on the card.
That’s because – say your credit limit is $5000 and you make a purchase of $4000. That’s 80% credit limit utilization which will directly impact your score. Consider this, say your score is bad, your credit limit increase application will be denied by the bank.
Now consider this, you have an excellent credit score of more than 750+, you call the bank and ask them to increase the limit (or if your limit is good the bank will do it automatically every year – pre-approved. There’s no harm in increasing your credit limits as unless you use it, you dont have to pay a dime for the interest or to the bank).
Say, for example, the bank increases your credit limit from $5000 to $10000. You see the difference, your $4000 purchases now contribute to only 40% of your overall credit limit utilization which will not hurt your score much. That’s why having good credit is so much better, for you and your family.
That’s why NEVER get into bad debt! If you are stuck with one, find ways to come out of it soon. There are a ton of articles on this blog on making EXTRA FREE money in your spare time, saving money, frugal living and personal finance apps that can help you. Do look out for those blog posts or browse through the categories!
What Are Credit Inquiries and Does It Hurt My Credit Score?
The simple answer is “YES”, credit inquiries do hurt your credit score. The impact is immediate and you can see all the credit inquiries in the report section.
First Of all, what are credit inquiries?
When you look at your credit report, you’ll see all the credit inquiries listed there. In the long run, they don’t have much impact on your credit scores but for the short-haul yes they do.
When you apply for a new credit product in the market, such as a new credit card, internet connection, personal loan, line of credit etc, companies usually run the credit checks, which are nothing but credit inquiries. A lot of credit inquiries on your file over the past 2 years or so will have a huge impact on your score. The lesser the credit inquiries on your file the better.
The impacts will not be for long, 6 – 8 months at the max. But do remember that inquiries stay on the file for almost 2 years before it completely goes off the record.
What Are Soft and Hard Credit Inquiries?
Again, there are soft credit check inquiries and hard inquiries depending on the credit product you are applying for. As the name implies, soft credit inquiries do not have much of an impact on your credit report while the hard checks will be costlier on the report.
Do remember that, credit inquiries can also be made to check eligibility before actually applying for the product. So be double sure before you actually enter into one. Make sure you know that your credit report is being pulled, inquiries can really ruin your file if too many on your file. Better be careful than sorry!
Borrowell Vs. Credit Karma Vs. Mogo
Now then, let’s right jump into the topic for today – Borrowell Vs. Credit Karma Vs. Mogo. Three huge massive Fintech credit companies offering free services. But why?
These companies also provide a plethora of other services such as credit monitoring, credit cards and personal loans, mortgages, identity protection and a host of others.
Borrowell, Credit Karma, and Mogo all have services that are similar and some others that are unique to each of them. So if you only want to check your credit score, any of them will do. However, if you want a more robust list of services in Canada, this review will compare all three of them so that you know which one makes the most sense for you.
This financial tech company came into existence in 2014 and are mostly known for their personal loans. Besides their free credit score and report services, the company also provides a host of other financial products such as mortgages, personal loans, and credit cards.
This online lender has garnered itself a series of powerful partnerships to enable it to keep delivering top-notch services. Borrowell partners include EQ Bank, Meridian, Capital One, CIBC, Scotiabank, BMO and more. The company currently boasts over 900,000 customers who have used them to check their credit scores and reports since 2014.
Borrowell’s Loans are all categorized and structured as unsecured personal loans. To get a loan from Borrowell, your loan amount must fall within the range of $1000 – $35,000. Depending on your loan amount, loan term, credit situation, and personal income, Borrowell will tack on a fixed APR ranging from 5.99% to 29.19%. This interest rate also incorporates the origination fee required after your loan is approved.
Borrowell only offers two loan terms: 3 years and 5 years. However, you can pay off your loan earlier if you want lower interest rates. There is no early repayment penalty. Borrowell’s personal loans are not available to residents of Quebec
Borrowell’s credit cards and mortgages have a dedicated platform on the Borrowell website where you can go and compare the different credit card and mortgage options and apply for them. This comparison site will show you the interest rates, credit limit requirements (for credit cards), mortgage rate types (variable or fixed), terms of the mortgage or credit card, and other conditions.
They have a vast network of credit card and mortgage providers so that you always have a lengthy list of options to choose from
Borrowell also delivers banking services, insurance, savings and investments. Whenever a customer opts for a credit card, mortgage, investment, or any other financial products through Borrowell’s platform, the product’s provider (banks, lenders, mortgage companies etc in Borrowell’s network) pays them a commission.
You can read my complete review on Borrowell here – Borrowell Canadian Review – Free Credit Score and Report (2020)
Credit Karma has been operational for 7 years longer than Borrowell. However, until recently they only operated in the United States. This personal finance company through its services cater to over 60 million people.
Like Borrowell, Credit Karma offers free credit score checks and credit reports, but unlike Borrowell and Mogo, they offer score checks and reports weekly and not monthly. However, they are mostly known for their credit card service.
On the Credit Karma platform, you can compare a plethora of cards for different reasons and apply for the best fit. They did a good job of categorizing different cards for different financial situations: cards for good credit, bad credit, balance transfer, low-interest cards, rewards and cashback cards, secured cards and more.
They do have other financial products such as loans, tax filing, high-interest savings, personal finance advice and a lot more. Their loans include personal loans, home loans, business loans, student loans, auto loans and more.
Credit Karma’s credit score service utilizes TransUnion’s Credit Vision Risk Scoring model for checking your score and report. So don’t be surprised if your score checks on Credit Karma tally with the results from the credit bureau. Currently, Credit Karma majorly offers credit score, report and monitoring services in Canada and almost nothing else. The full-service suite can only be accessed if you live in the U.S.
You can read my complete review on Credit Karma here – Credit Karma Review – Free Credit Score And Report (2020)
Between Credit Karma and Borrowell, Mogo looks more like the latter. Mogo is also the oldest of the three: it was founded by David Feller in 2003 and is headquartered in Vancouver.
Mogo is a publicly-traded company and is listed as MOGO on the Toronto Stock Exchange (TSX, since 2015) and the NASDAQ (since 2018). The company currently boasts over 700,000 customers.
Mogo’s complete line of financial products includes free credit score checks, mortgages, identity fraud protection, personal loans, cryptocurrency trading, and Prepaid Visa Card.
Key Features and Benefits of Mogo:
1. Mogo FREE Credit Score checks
This is supplied once a month to their customers for free. Mogo’s credit score is the same as that from Equifax. While you cannot directly get your credit report with Mogo, they redirect you to Equifax’s platform to get one
MogoMortgage, as it is called is the service that provides mortgage offers from different financial institutions to Mogo’s customers based on their particular needs. You can use the Mogo App to check your mortgage offers and apply
3. Identity Fraud Protection
Information and identity theft isn’t anything new. Mogo offers protection for your sensitive data through its MogoProtect service. This service carries a monthly subscription fee of $8.99. However, with the Mogo-generated promo code “PROTECTME”, you get one month of identity fraud protection for free
4. Mogo Personal Loans
Mogo’s loan offerings are really flexible. If you’re cash-strapped for whatever reason, you can find a personal loan that speaks to your specific situation. Loan amounts range from $2000 – $35,000. While your APR starts at 5.9%, Mogo’s loan APR maxes out at an alarming 45.9%, so you need to be careful with that.
Mogo’s loan terms are anywhere from 2 to 5 years and can be fully repaid in one repayment without incurring any penalties.
If you don’t love your loan experience, Mogo offers you the option of just paying back your principal and they’ll also refund all the fees and interest your loan accrued at that time. The condition though is that this can only happen within the first 100 days of your loan term
5. Cryptocurrency trading
Mogo is the only one on this list that offers crypto trading. Mogo offers a crypto-exchange where crypto enthusiasts than buy and sell different cryptocurrencies at real-time prices. This can be done via Mogo’s mobile app.
The crypto trading comes with a 1% fee for every trade. There is a $5 bonus when you sign up to the platform and a $5 bonus for every friend you refer
6. Mogo Prepaid Visa Card
This no-fee cash back card helps Mogo customers to better control their spending. For every purchase made with the card, Mogo offers a cashback of 1.5% for domestic purchases and 3% for foreign purchases.
There is also no limit on the amount of cashback you can make. However, while there is no annual fee, this Prepaid Visa Card attracts a fee of $1.50 for using Canadian ATMs and 3% for international ATMs
You can read my complete review on Mogo here – Stay Away From Mogo! It’s Going To Destroy You Completely!
There you go, that was my honest review comparing Credit Karma, Mogo and Borrowell. Like I said, all three companies offer free credit scores In Canada.
All these companies have their pros and cons, just like Credit Karma that doesn’t work in Canada except for its credit score check and reports. Mogo has a scary APR higher limit. And Borrowell is not very flexible in terms of the loan terms they offer.
Whatever the case, your due diligence is the final decider. If you find one that helps you make better financial decisions overall, go for it – and it doesn’t necessarily have to be any of the three on this list.