Ontario woman who wanted to buy a house shocked to learn she had zero credit score

[canada-man]

TORONTO -- An Ontario couple decided when they retired they would sell their home and travel the world, but then came COVID-19.

"Our plan was to start travelling and see the world, but the pandemic came along and changed everything," Patricia Bartkiw told CTV News Toronto.

Patricia and her husband Myron now rent a home in Whitby, Ont. and decided last fall since they can't travel they would buy another home.


When they went to the bank to get a mortgage, they were denied because they were told Patricia had a zero credit score or not available credit score.

The couple say they were shocked.

In July 2017, Patricia's credit score was 771 and in May 2020 it was 670. In October, when they went to buy a home it was zero.

"Everything is paid off, our cars are paid off and we are paying rent so that automatically gets paid through the bank each month," Patricia Bartkiw said.

"We've never been in debt, we have never owed anything and we have never missed a payment," Myron added.

A credit score is a number that is assigned to an individual by credit bureaus to help banks and other lenders decide if you're a good credit risk. Scores usually range 300 and 900, with a higher score meaning you’re a better risk.

The couple said while they could still buy a home without a mortgage they don't want to use up all their equity.

"We are sitting in limbo and we can't buy anything," Myron said, adding “it makes no sense at all."

When CTV News Toronto reached out to Equifax, a spokesperson said that credit scores are calculated in different ways and there needs to be activity to generate one.

“While there is no such thing as a score of zero…consumers may not be aware after a period of no credit activity their credit files may become 'unscoreable,'" Equifax said.

In Patricia’s case Equifax said "The individual's credit file was not scoreable due to a lack of reported credit activity."

Equifax reviewed her file and said while it was in order at the time, recent activity helped generate a credit score of 700.

With a credit score, Patricia and her husband can now show lenders she is a good credit risk and she and her husband can now get a mortgage to buy a new home.


"I feel pretty good and it shows that I now exist," she said.

If you're planning to buy a house, a car or some other large purchase you may want to check your credit score beforehand to make sure there are no mistakes.

You may also have to generate some credit activity to make sure you have a credit score.

Ontario woman who wanted to buy a house shocked to learn she had zero credit score | CTV News

 

[explorerzip]

This is the fallacy of a credit score. You have to keep incurring debt to keep a good score for the privilege of incurring more. Who knows what happened between May and October 2020, but they likely stopped using their credit cards. That is plausible because there was no places to spend money during that time.

If they were in a position to buy a home without a mortgage then they should have just done it. Better to own a home free and clear then to be shackled to a mortgage. If covid didn't happen then they could have rented out the whole house while travelling.

 

[scdave2003]

Maybe buy the house and then take out a home equity loan and make payments on that.

 

[Jenesis]

This is the fallacy of a credit score. You have to keep incurring debt to keep a good score for the privilege of incurring more.

This is why I pay for everything during the month with my CCs and then pay them off at the end of the month. Keep the credit score good and high.

 

[Born2Star]

Well I’d say fishy. They probably use cash for everything....

 

[WULA]

A Credit Score is a score of your credit.

IF you have no credit, you cannot have a score.


That is why it is useful to use credit cards and pay them off each month.


I have 4 cards that I use, each one for different purposes. It is the easiest way to keep track of and categorize your actual expenditures and forget about budgeting.

By the way, IF you have credit cards that you do not use, credit bureaus can typically deduct 25 points for each one in determining your credit score.

 

[koreanjames]

Maybe buy the house and then take out a home equity loan and make payments on that.

exactly. i've done this in the past as well, many have - for whatever reason need be (not enough credit history in a new country, maxxed out mortgages based on investment properties, or zero credit like in the case here), just pay it off and heloc it later if there are better investments that can me made with the funds/equity.

it also still makes zero sense they had no credit. did they not pay for gasoline? internet? 407 bill? car insurance? cell phone bills? groceries? they can easily get a credit card, payOff in advance/onTime and at least get a few % back or free groceries via a credit card with ZERO financial penalty.

it's impossible to believe that those whom are mortgage free, car debt free, etc etc dont understand or have reaped the rewards of basic credit card knowledge. unless they were purposely living like there was no electricity or modern creature comforts i cant see this being possible.... you would have to be pushing away absolutely basic knowledge that would have been surely passed from friends or family to be in this situation.

 

[Mr.Know-It-All]

It's easy to maintain a credit score.. just buy small items like groceries then pay it off immediately. No debt or interest incurred.

I suppose it's possible that they pay for almost everything using cash and debit card (which is essentially cash) rather than a credit card. I know people that are fearful of credit cards and use debit only.

 

[explorerzip]

exactly. i've done this in the past as well, many have - for whatever reason need be (not enough credit history in a new country, maxxed out mortgages based on investment properties, or zero credit like in the case here), just pay it off and heloc it later if there are better investments that can me made with the funds/equity.

it also still makes zero sense they had no credit. did they not pay for gasoline? internet? 407 bill? car insurance? cell phone bills? groceries? they can easily get a credit card, payOff in advance/onTime and at least get a few % back or free groceries via a credit card with ZERO financial penalty.

unless they were purposely living like there was no electricity or modern creature comforts i cant see this being possible.

The article says that the wife didn't have a score because lack of credit activity. I assume the husband still had one and was paying the other bills. The article says "we are paying rent so that automatically gets paid through the bank each month." That suggests they are on a pre-authorized payment plan. They could have easily set that up for most other recurring bills and used Interac or cash for everything else.

 

[koreanjames]

yes but only 6 months may 2020 or so ago they still had a credit score and hence credit activity.

Some holes in this story

The article says that the wife didn't have a score because lack of credit activity. I assume the husband still had one and was paying the other bills. The article says "we are paying rent so that automatically gets paid through the bank each month." That suggests they are on a pre-authorized payment plan. They could have easily set that up for most other recurring bills and used Interac or cash for everything else.

 

[peteeey]

Same thing happened to my wife. She applied for a Bay card in order to get a discount and was refused the card. It turns out that all the cards are in my name and she always used a secondary card. She was told she had no credit rating and to apply for a card on her own and use it monthly. It didn't matter how much she bought on it, just to use it. Next time she tried to get a Bay card, she was approved.

 

[y2kmark]

This is the fallacy of a credit score. You have to keep incurring debt to keep a good score for the privilege of incurring more. Who knows what happened between May and October 2020, but they likely stopped using their credit cards. That is plausible because there was no places to spend money during that time.

If they were in a position to buy a home without a mortgage then they should have just done it. Better to own a home free and clear then to be shackled to a mortgage. If covid didn't happen then they could have rented out the whole house while travelling.

Really? There are only two ways to get a zero credit score. You are four years old or you never pay your bills. Stop using your credit cards? Try not paying all of your maxed out cards. If you can pay cash and buy a property outright, you should do it. Gee, that's good advice. Ever considered a career in rocket surgery?

 

[Jenesis]

It's easy to maintain a credit score.. just buy small items like groceries then pay it off immediately. No debt or interest incurred.

I suppose it's possible that they pay for almost everything using cash and debit card (which is essentially cash) rather than a credit card. I know people that are fearful of credit cards and use debit only.

I know people who are scared as well. I’m trying to get my kid to start using one. To help build their credit as well, but fear stops any attempts I make. Which is strange because my kid is great with savings and money.

I use the cards all the time because I like all the rewards. I get almost a free month of most variable expenses paid once a year.

I get mad when I pay any amount of interest. I hate giving them an extra money. Other then the annual fee. Even then I play the rewards. Have a bank plan that covers the CC annual payment. Have a Costco mastercard to cover the annual fee of the membership. Shit like that.

I say, if you can, play the reward game and make them give you money.

 

[explorerzip]

Really? There are only two ways to get a zero credit score. You are four years old or you never pay your bills. Stop using your credit cards? Try not paying all of your maxed out cards. If you can pay cash and buy a property outright, you should do it. Gee, that's good advice. Ever considered a career in rocket surgery?

Ever consider replying to people with real insight or is sarcasm all that you have?

Like everyone here does including you, I can only speculate based on what's in the article and video. Equifax said there's no such thing as a zero credit score, but you can become "un-scoreable." I have no idea if this is true or not. I've never been in that position nor do I want to.

What is wrong with buying a property outright if you can? I just doesn't make sense to me to spend your life paying off your mortgage just to get into another one at retirement age no less.

 

[rhuarc29]

No such thing as a zero credit score. Be more accurate to say she had no credit score.

 

[Jasmina]

Doesn't really make sense that she'd go from 770 to zero just with Covid alone though. That's a pretty huge jump. Even if she had stopped spending, that means she also started incurring debt (in my understanding) to have it tank like that. There had to be a negative action as well I would think. I suspect this isn't the whole story.

The article says that the wife didn't have a score because lack of credit activity. I assume the husband still had one and was paying the other bills. The article says "we are paying rent so that automatically gets paid through the bank each month." That suggests they are on a pre-authorized payment plan. They could have easily set that up for most other recurring bills and used Interac or cash for everything else.

 

[explorerzip]

Doesn't really make sense that she'd go from 770 to zero just with Covid alone though. That's a pretty huge jump. Even if she had stopped spending, that means she also started incurring debt (in my understanding) to have it tank like that. There had to be a negative action as well I would think. I suspect this isn't the whole story.

Oh for sure. We're missing a lot of info in the story.