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By Jeffery Bishku-Aykul — McGill
Daily (McGill University)

MONTREAL (CUP) — “I never dreamt
that they were going to take my Visa away
from me. That was a shock. I thought,
‘This year I'll be good and I'll fix it.’ But
they took my credit away from me.”

Concordia University student Brandi
Goulding, 20, first began struggling
with debt after moving to Montreal.

This month her Visa card expired with a
$500 debt and no option for renewal. For
Goulding, repaying this debt, as well as
several student loans and a maxed-out
$3,600 Future Shop credit card has been a
major challenge.

Her relationship with credit began
shortly after her 18" birthday, when she
applied for her first Visa card.

“One of my best friends since
growing up, her birthday is two weeks
before mine. She got a Visa on her

birthday. It was so easy. She walked in,
she said she wanted one and a week later
she had one. And so I decided, ‘Hey, if
she can do that, I can do that too,” said
Goulding.

“Tt was a novelty. It was something
I couldn’t do before and I wanted to do
then. I wanted a Visa,” she added.

Goulding received her Visa after a
short meeting with a TD representative;
she filled out a form and was asked
several brief questions regarding her
employment status and income. Yet there
was no discussion of credit ratings. Since
then, Goulding has never requested a
credit report.

“Having a credit rating has not
affected me yet; I haven’t hit that road
yet. I’m really worried for when it does.
The second I try to get a bank loan or
certain jobs they are going to check my
credit rating.”

Goulding is not alone.

As consumers, everyone is affected
by their credit rating, a statistic that
determines what we can buy, which phone
plans are available to us, which credit
lines we can open and which maximums
we may obtain on our credit cards. Credit
bureaus have existed for more than a
century. However, as the market for credit
cards grows and companies obtain an
ever-increasing amount of information
about their customers, new concerns are
being raised about consumer privacy
and the effect that these ratings have on
borrowers.

Furthermore, these companies are
part and parcel of North America’s credit
economy, which critics blame for a
host of problems, including the current
economic downturn.

TransUnion and Equifax are by
no means household names. But these
two companies are Canada’s largest
credit bureaus. Both companies are

 

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multinational and publicly traded on Wall
Street.

The calculation of credit ratings
is a big business. In 2001, Equifax had
operating revenue of just over $1 billion
USD; by 2009, it had increased to over
$1.8 billion.

Tom Reid, TransUnion Canada’s
director of consumer solutions, explains
in a conference call that his company
offers a way for lenders to understand the
risk that various customers represent.

“The credit granting community
doesn’t care what your score is, per se.
Your score is just a label that tells them
what the amount of risk you represent is,”
he said.

The most important type of credit
rating for consumers is the Beacon Score,
which is graded on a scale of 300 to 900
and represents your likelihood of repaying
debts to creditors.

-Continue Pg.12

 

 

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