Broker: Equifax has changed the way it evaluates credit

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It may have just gotten harder for your clients to qualify for a mortgage … or has it?

“The big thing is that [Equifax] is looking more at credit utilization; at the end of the day, if people are running close to their balances, it’s going to impact their credit score even heavier than it already does,” Karen Monteiro, a franchise owner with Mortgage Alliance, told “They changed the algorithms to put more emphasis on credit utilization.”

Equifax unveiled a new BEACON score, which will be delivered on the Expert and Morweb platforms, earlier this month.

BEACON 9 is “the newest FICO Score version in Canada to help you make credit decisions with confidence,” according to the user guide provided to brokers, which has been obtained by “It allows you to effectively evaluate new prospects by predicting the probability of an account going ‘bad’.

The new change was discussed in a general meeting at Mortgage Alliance, according to Monteiro, who said the new rules score will more heavily weigh credit utilization.

However, it may not be that simple. It seems more clarification about how the change will impact clients is needed.

The “basic rules” have not been changed for BEACON 9, according to the user guide; but BEACON 9 will score more files due to the inclusion of mortgage and telco trades. 

“We’re using a new primary delinquency score called BEACON 9 and that was released Saturday, June 4,” Eric Poblete, strategic account executive with Equifax Canada, told “So from there, we’ve been doing education sessions about the differences and maybe in those education processes … maybe they’ve put an emphasis on that. It’s really no different. It’s a different delinquency score, but the rules are still the same.

“BEACON 9 is a different score, so potentially there could be changes in regards to some of the items. There are differences.”

  • Mike on 2016-06-13 9:18:23 AM

    Have certainly noticed the change, getting beacons in the high 800's which you never saw before. Seems like an old 809 is now an 875. Now can we loosen up the requirements for clients who have proven themselves?

  • Mike Havery on 2016-06-13 10:15:56 AM

    New scoring will take some getting used to. Seems to heavily penalize over limits and recent delinquents

  • Roger on 2016-06-13 12:08:19 PM

    So it's" really no different", but " there are differences" ??? Should run for politics...

  • Jose on 2016-06-13 12:23:51 PM

    We just had a presentation on beacon 9 and from what I can see it appears it will be an improvement. Lines of credit at or close to limit, a few lates on small balance CC and multiple inquires for he same product over 45 days (previously 15) will not impact your score.

  • James Wood on 2016-06-13 1:54:46 PM

    When are lenders going to take into account the fact that many consumers now use debit cards which reduces the number of trade lines? I recently had a client with no active trade lines because she only uses a debit card; therefore no credit score is generated. Even though she has income from a casual job and child tax credits most lenders were unwilling to use her income.

  • Ron Butler on 2016-06-13 5:03:42 PM

    Wait till you see a file with no late payments at all and nothing over limit but with 6 different R trade lines right at their limits: 611 score. No derogs, not one. Hello Beacon 9.

  • John Greenlee on 2016-06-15 4:11:13 PM

    Ron, I am not sure that that is a result of Beacon 9. I recall a client I had about 3 years ago, score was 586 and she had 5 or 6 Revolving accounts just below their limits and 2 large car loans. She could service the debt no problem, all were long standing accounts, zero late payments, zero over limit still a score of 586.

    I saw your other example under the other article, I certainly hope a drop from 742 to 648 by increasing debt $200 isn't a new norm for Beacon 9. However; if the credit card only has a $500 limit (as an example), then I can see that happening even before Beacon 9 as utilization of credit is part of their algorithm (I know you know that this is for others reading).

    I am interested to see how this plays out in the next few weeks.

  • Ron Butler on 2016-06-15 4:37:15 PM

    John, I do not disagree that many folks will have very little impact and even the occasional upward movement of previous 790 scores to 825 but the effect on those clients who may have been 712 three weeks ago and are now 664 under Beacon 9 is not a good thing for mortgage brokers.

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