Velimir Drecun says he wouldn’t have realized his credit rating had apparently plummeted if it hadn’t been for a landlord who specifically asked him for an Equifax credit check when he wanted to rent a basement suite in Toronto earlier this month. .
Now, Drecun is warning other Meridian Credit Union customers to check their Equifax credit scores after learning that an error within the credit reporting company had doubled a credit card over the limit.
His score was 526 on Equifax; 150 points less compared to another credit bureau.
“It’s frustrating,” Drecun said. “You put in the work to make it better and have a good story… and you’re still at the bottom of the barrel.”
Equifax Canada told CBC Toronto that a change in technology had doubled credit cards on credit score reports for some Meridian customers.
Drecun’s score was changed after he and the CBC contacted Equifax, but not in time for him to prepare his rental application. He is concerned about other Meridian customers who may not know that his credit could be affected.
“If it’s affecting your entire credit card customer database, it’s a lot of people,” Drecun said. “I know how stressful it was for me and I think it would have been nice if someone [informed others] if they nailed”.
Meridian is the largest credit union in Ontario and the second largest in Canada. Equifax says customers across the country are affected, but neither Meridian nor Equifax said how many.
Equifax says it is working to resolve the issue in September.
It maxed out at $3,000
Meridian Visa credit cards were previously issued and serviced by a third party company. Last October, Meridian took over the cards and, Drecun says, customers were issued new Visas while old accounts were closed.
But both cards appeared on your Equifax report, resulting in a lower score.
Drecun says he normally wouldn’t have known because he gets his credit reports from TransUnion, which lists his credit as “good” at 676.
When he first saw the 526 on the Equifax report, he thought he was a victim of fraud.
The report showed two maxed-out credit cards with a $3,000 limit, while TransUnion only showed one.
“It’s like opening two credit cards [for] the same person for the same amount on the same day,” Drecun said.
He says Equifax captured the credit card balance when it ran out last year, because he was starting a business. He says that he has since paid part of the debt.
While waiting for the solution, Drecun put some money on another credit card to improve his Equifax score, but it only increased 23 points and was still listed as “poor.”
Mark Kalinowski, credit counselor and financial educator at the Credit Counseling Society, says a 150-point discrepancy like Drecun’s can make a “dramatic” difference when it comes to getting credit. He says it could force a client to get a mortgage or loan from a private lender instead of a bank.
“The interest rate difference could be not just several points, but five to 10,” he said.
Kalinowski says that different credit bureaus often report different scores based on the same information. Still, he says, banks can deny a loan to someone with a “poor” credit score.
Or, if a loan is approved, “depending on the type of loan or credit we have, especially in terms of a mortgage, it can add tens of thousands of additional dollars over the life of that product,” he said.
Meridian’s vice president of shared services says the credit union is reporting the information correctly to both Equifax and TransUnion.
Nick Cicchino said in an email that Meridian employees have been made aware of the problem and are trained to help customers who inquire about incorrect credit reports.
Equifax Canada says that customers who need immediate help can phone or file a dispute online and resolve the issue independently.
The credit bureau says it works to resolve disputes within 30 days, in accordance with regulatory timelines.