TORONTO, July 19, 2022 (GLOBE NEWSWIRE) -- Borrowell, Canada’s leading company helping consumers to understand and build credit, announced a first-of-its-kind Canadian program that can empower millions of renters to build credit history by using their monthly home rent payments. This service does not require the participation of the landlord.
Reporting this information to Equifax Canada, a data, analytics and technology company, and Canada’s largest consumer credit bureau, Borrowell Rent Advantage provides an opportunity for renters to build credit history, similar to how homeowners can build credit with their monthly mortgage payments.
The payment history on someone’s credit report is the largest factor in determining their credit score, which is an important factor considered by lenders to assess a borrower’s credit-worthiness. Consumers with lower credit scores may be less likely to qualify for credit cards, loans and mortgages at competitive rates.
Rent Advantage is a potential benefit to millions of Canadian renters and could particularly help the approximately 3.8 million Canadians with lower credit scores of 660 or under. A survey conducted by Borrowell in June 2022, answered by 2,873 respondents with credit scores of under 660, found that 68% were renters, a stark difference compared to the Canadian average of 32% of households identifying as renters, according to Statistics Canada.
“We want to make the credit system work better for underserved Canadians. This program was built with renters in mind and allows them to use payments they’re already making to build credit history so they may qualify for more financial products at better rates in the future,” said Andrew Graham, CEO and Co-Founder of Borrowell. “Tenants who demonstrate good payment behaviour should be able to benefit from those actions, the same way a homeowner paying a mortgage would – it’s only fair.”
Renters sign up to Borrowell and connect the bank account from which they make rent payments. There is an affordable monthly subscription fee of $5 and consumers can cancel any time without financial penalty, although consumers are encouraged to report for as long as possible to create a significant historical record. As payment history makes up a significant portion of the credit score calculation, individuals may benefit from a longer period of consistent reporting of this information.
"Rent is often the largest expense Canadians have each month. Recording payment history can give lenders a more accurate picture of a consumer so they can better understand the consumer’s credit-worthiness," said Sandy Kyriakatos, Equifax Canada’s Chief Data Officer. "We are excited to work with Borrowell to enable renters in Canada to report their rental contributions while expanding the completeness of our payment history data. It’s a win-win for both consumers and lenders."
With the rising cost of homes across Canada, Rent Advantage may also help renters who aspire to be homeowners with improved mortgage affordability in the future. Generally, buyers with credit scores of about at least 660 to 680 can start accessing more competitive mortgage rates, subject to their lender’s criteria.
Rent Advantage complements Borrowell’s existing suite of credit education and credit building tools, including Credit Builder, an installment loan product, and free credit monitoring which is used by over two million Canadians.
Rent Advantage will be available to a selection of Borrowell members starting July 2022 and will be expanded to the public later this year. Interested consumers can sign up for the waitlist on borrowell.com/rent-advantage.
About Borrowell
Borrowell’s mission is to make financial prosperity possible for Canadians. As Canada’s leading company helping consumers understand and build credit, Borrowell is trusted by over 2 million members and offers free access to credit monitoring, credit coaching and personalized financial product recommendations. The company also provides affordable options to help Canadians build credit history and achieve long-term financial success, including Credit Builder, a recently-launched credit building tool and Rent Advantage. Borrowell has won numerous awards including Globe and Mail Canada’s Top Growing Companies, LinkedIn Top Startups, Best Workplaces in Canada, and Best Workplaces for Women. For more information, visit borrowell.com.
About Equifax
At Equifax (NYSE: EFX), we believe knowledge drives progress. As a global data, analytics, and technology company, we play an essential role in the global economy by helping financial institutions, companies, employers, and government agencies make critical decisions with greater confidence. Our unique blend of differentiated data, analytics, and cloud technology drives insights to power decisions to move people forward. Headquartered in Atlanta and supported by more than 13,000 employees worldwide, Equifax operates or has investments in 24 countries in North America, Central and South America, Europe, and the Asia Pacific region. For more information, visit Equifax.ca.
For more information, please contact:
Rachel Thexton
Thexton PR
604-729-1448
rachel@thextonpr.com
