Does the US-based credit analytics company - Fair Isaac Corporation (FICO) have a base in Canada? Know if FICO score is used in Canada? Yes, FICO score is used in Canada to assess the creditworthiness of a borrower.
What is a FICO Score?
The full form of FICO is Fair Isaac Corporation. This software gives the borrowers a 3-digit score after examining their loan repayment history, a mix of loans taken, new loans applied for, the number and value of debts under the borrower’s obligation and the time span of their loan history.
Is FICO score used in Canada?
FICO is a software analytics company that is based in the United States of America and it claims that 90% of Canadian lenders that includes top financial institutions and banks use the FICO score as a tool to evaluate the financial reliability and credit worthiness of a borrower. Reports suggest that FICO has been an intrinsic part of Canada’s lending and borrowing industry.
How does FICO operate in Canada?
FICO has a unique methodology to calculate the credit score of a borrower. This method is patented by the company. FICO sells its technique to the two well-established credit bureaus in Canada – Equifax, and TransUnion. FICO doesn’t do the job of collecting, storing, and sharing the data of Canadian borrowers, whereas its niche is to devise calculation techniques for various sectors such as automobile, mortgage, credit cards etc., It also keeps updating its methodology frequently. FICO established its latest version - FICO Score 10 in Canada in April 2022.
Who can access your score?
The credit bureaus share their information with the following entities:
- Government of Canada
- Employers seeking background checks
- Insurance providers
- Banks
- Financial institutions
- Credit card companies
FICO Score in Canada
It is inferred that FICO score is one of the most trusted tools used by lenders to assess your creditworthiness and it is vital that you make prompt loan repayments in order to maintain a good score. This will help your future loan application and borrowing process uncomplicated. In some instances, the lenders may offer you loans at a lower interest rate as you are deemed to be a less risky and a reliable borrower.