Equifax Canada Explores Using Payday Loan and Rental Data to Improve Credit Scores
Equifax Canada is considering the impact of incorporating payday loan data into people’s credit scores. The agency believes that including non-traditional data sources could provide a more comprehensive view of consumers’ credit health.
Equifax suggests that consumers who consistently repay payday loans could see improvements in their credit scores, which might lead to better loan terms and interest rates as they work to rebuild their credit.
Last month, Equifax announced its exploration of using rental data in credit score calculations. They noted that integrating “alternative data” could establish or enhance the credit scores of millions of Canadians.
The federal budget has urged banks, fintech companies, and credit bureaus to develop tools enabling renters to report their rent payment history. The government believes this initiative could help more renters become homeowners by strengthening their credit scores through a record of on-time rent payments.
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