Unless you’re one of those unique Mortgage Broker News readers who has been living in a hole for the past five months – and, considering the state of the world, who can blame you if you were? – you are likely aware that Equifax’s new mortgage inquiry process came into effect today.
Word of the updated process first made its way into industry ears in April, when Equifax first announced its intention to have all mortgage brokerages authorize an amended broker contract to ensure that Equifax information can be shared only with credentialed lenders. In May, the company said it would be requiring all lenders to be assigned a unique Equifax Member Number if they wish to continue accessing credit files through industry connector platforms. July 1 was the original deadline for lenders to have their Member Numbers in place, but it was delayed to provide lenders more time to get in line with the new requirements.
On the off chance that some readers are still unaware of what Equifax’s new requirements are, here’s a quick rundown:
- As of today, Equifax requires all lenders to have an identifying Member Number in order to continue receiving files from brokers.
- Only brokers who have signed amended contracts with Equifax will have access to credit files through the industry’s connector platforms (Filogix, etc.).
- Every single credit inquiry will be posted with both the broker’s and lending institution’s name via all connector platforms. Only credentialed lenders will be granted access to these files.
- If brokerages have still not signed their amended contracts, Equifax is urging them to visit https://www.equifax.ca/BOI/en/form, where principal brokers or another signatory of the brokerage can initiate the process.
- Lenders who are not currently credentialed with Equifax are encouraged to visit [email protected].
The changes were made to ensure that the only people in a position to view borrowers’ credit files will be those entitled to see them, which was not the case prior to the change, when credit information frequently found its way into the hands of brokers who hadn’t made the request to see it. In a release earlier this month, Equifax says it is “increasingly important for all of us to do whatever we can to protect consumers and mitigate any potential risks, especially in light of the rising incidence of data breaches and the use of peoples’ information for nefarious purposes.” (The company knows a thing or two about data breaches.)
Equifax says the new inquiry process will benefit all parties involved. The “primary benefit”, the firm says, will be felt by consumers. By providing a complete, accurate picture of who has legal access to an individual’s credit information, Equifax says it is strengthening consumer trust in the industry – while, somewhat ironically, also providing an avenue to monitor the misuse of their data.
“Anything that provides opportunity for the consumer to know what’s happening with their information is a good thing,” Filogix’s Ryan Spence told Mortgage Broker News in July. “It’s certainly beneficial to the consumer to know who’s seeing their information and where it’s being sent.”
By participating in a system that collects all consumer file activity, Equifax says lenders will have access to improved insights and more robust analytics capabilities. According to the company, increased data accuracy “leads to better credit decisions, greater understanding of consumer behaviours, which in turn leads to better account management.”
Brokers, too, are expected to benefit from having access to better data, which can assist them in piecing together a more accurate picture of their clients’ credit histories.