Toronto-based FinTech startup Borrowell has launched a credit building program to help renters build credit history through monthly rent payments.
Called the Borrowell Rent Advantage, renters who have applied for the program will be reporting their monthly rental payments to consumer credit bureau Equifax Canada
“Tenants who demonstrate good payment behaviour should be able to benefit from those actions, the same way a homeowner paying a mortgage would.”
– Andrew Graham, CEO of Borrowell
Borrowell noted that this program could particularly help the 3.8 million Canadians with credit scores of 660 or under. According to the company, it conducted a survey consisting of 2,873 respondents with credit scores of under 660 and found that 68 percent of them were renters.
Andrew Graham, CEO and co-founder of Borrowell, said this initiative was created with renters in mind to allow them to use the payments they’re already making to build credit history. He added that this may qualify them for more financial products at better rates in the future.
“Tenants who demonstrate good payment behaviour should be able to benefit from those actions, the same way a homeowner paying a mortgage would – it’s only fair,” said Graham.
Renters must sign up for Borrowell and connect to the bank account from which they make rent payments. There is a monthly subscription fee of $5.
Founded in 2014 by Graham and Eva Wong (COO), Borrowell provides education, monitoring, digital tools, and product recommendations aimed at achieving financial stability.
As of November, Borrowell claims to have reached over two million users, about two years after it achieved around one million in May 2019.
Borrowell has been working with Equifax since its inception. In 2016, Borrowell teamed up with Equifax to provide users with access to their credit scores. That partnership later expanded in 2018 to also offer free credit reports through Equifax.
Borrowell has been growing its credit education product suite in recent years, and last year, raised $25 million CAD to support its acquisition of Refresh Financial, a Central Okanagan, British Columbia company that offers financial products to help users improve their credit scores.
When Refresh’s acquisition was announced, Borrowell said that it planned to integrate Refresh products like the credit builder loan and the secured credit card over the next six to twelve months.
A spokesperson for Borrowell told BetaKit that Refresh’s products are currently available in the Borrowell marketplace, and are integrated into various Borrowell product flows and work processes.
Prior to purchasing Refresh, Borrowell had previously raised $57 million in 2017, consisting of $12 million CAD in equity funding and $45 million in credit facilities.