Borrowell is a popular fintech company that is located in Canada and provides free credit scores, personal loans, and other financial services to its customers. However, many Canadians have been wondering if using Borrowell affects their credit scores. If you are part of this group, then you are in the right place, and we are here to guide you.
Ordinarily, using Borrowell doesn’t affect your credit score if a soft inquiry is used. Meanwhile, there are some important details to keep in mind when using this service. Nevertheless, we are going to explore how Borrowell works and how it may or may not impact your credit score shortly. Stay tuned!
What is Borrowell?
Borrowell is a fintech company that offers free credit scores, personalized financial recommendations, and personal loans. The main goal of this company is to help Canadians make better financial decisions, which would definitely help them improve their credit scores. Borrowell offers a variety of services, including credit monitoring, credit education, and credit-building loans.
Borrowell is purely an online service, which means that you can access it from anywhere with an internet connection. However, to be able to use Borrowell, you are expected to sign up for an account on Borrowell website. Once you’re done signing up, you’ll be granted access to your free credit score. Not only that, but you will also have access to different financial resources and tools.
How does Borrowell work?
Once a user signs up for Borroweell, they will be prompted to fill in vital personal information like their name, address, and Social Insurance Number (SIN). Once you provide all these details, Borrowell will then use that information to retrieve your credit report from Equifax, one of Canada’s two major credit bureaus. It is important to note that Borrowell works hand-in-hand with Equifax to generate your credit report.
Once Borrowell has retrieved your credit report, it will then calculate your credit score using a proprietary algorithm. It is pertinent to note that Borrowell’s algorithm takes into account many vital factors like your payment history, credit utilization, length of credit history, and types of credit before summing up your credit score aggregate.
Apart from providing you with credit, Borrowell will also provide you with personalized financial recommendations based on your credit profile. Sometimes, these recommendations may include advice on how to improve your credit score as well as suggestions for credit cards, loans, or other financial products that may be of good benefit to you. In fact, Borrowell aims to give financial peace of mind to its users.
Does Borrowell Affect Your Credit Score?
No, Borrowell doesn’t affect your credit score. Ordinarily, using Borrowell doesn’t have any negative impact on your credit score. This is possible because Borrowell only uses soft inquiries on your credit report, which does not in any way affect your credit score. This means that Borrowell only runs a check on your credit report to get vital information. According to the norms, soft inquiries don’t affect a credit score in any negative way because they do not represent an application for credit. Examples of soft inquiries include checking your own credit report or having a potential employer run a background check.
Difference Between Soft And Hard Inquiries
Perhaps if you don’t really know the difference between a soft and hard inquiry on a credit check, then you’ve got to pay keen attention to this section.
A soft inquiry is a kind of credit check that does not affect your credit score in any negative way. Lenders and credit monitoring services normally use soft credit to check your credit history and then provide you with your credit score. In fact, a soft inquiry does no harm to your credit score. Examples of soft inquiries include checking your own credit report or having a potential employer run a background check.
On the other hand, a hard inquiry is a kind of credit check that may affect your credit scores if it is carried out several times on your credit report. Lenders use hard inquiries when you credit or loan. What happens is that if you apply for a loan, the lender will run a hard inquiry on your credit report to know whether you are creditworthy or not. But the negative part of this hard inquiry is that if there are numerous hard inquiries on your credit report, it may reduce your credit score. Not only that, numerous hard inquiries into your credit report will also make it a bit difficult to get loan approval.
Meanwhile, since Borrowell is a soft inquiry, it does not have any negative impact on your credit score. However, it’s important to note that if you apply for credit or a loan through Borrowell, that application will likely result in a hard inquiry on your credit report. This is because the lender will need to check your credit report to determine your creditworthiness because it is part of the application process. Please be guided!
Conclusion
Using Borrowell does not affect your credit score since it uses a soft inquiry on your credit report, which means that it does not represent an application for credit, hence it doesn’t have any negative impact on your credit score. However, if you apply for credit or a loan through Borrowell, that application may likely result in a hard inquiry on your credit report, which could potentially affect your credit score. Hence, we strongly recommend that you understand their terms before patronizing them, especially when applying for a loan.
