In British Columbia, where there are about 40,000 new immigrants coming in every year, the ability for these new productive Canadians to access credit facilities is important.
Leveraging trust scores instead of (or in addition to) credit scores can drastically change the landscape and enable more new Canadians to leverage credit and improve their lifestyles as well as contribute much more to our economy.
My family moved from Kenya to Canada in 1987, and we had zero credit here, even though we were trustworthy. That put our progress back at least a few years, and I can only imagine how much more successful I could have been if I had been given some credit.
Credit scores are regulated, and the bureaus are required to provide a credit report free to those who request it. They don’t have to make it easy to provide, but they do have to provide it. The score is calculated based on your ability to pay bills, which factors in such elements as income, debt load and a person’s track record in paying bills. All good if you have credit history in Canada.
Imagine that you are a new immigrant migrating to Canada and in your previous country, you had great credit. However, that history is just that – history – and not relevant in Canada. Even if you move from Canada to the U.S., your Canadian history is not considered there. Just considering how many businesses immigrants start and the number of employees they hire, imagine with well-deserved credit how much more this could be.
In B.C., banks and other lenders require credit scores that at present look only at credit data in Canada. If you’re a new immigrant, you won’t have that history, so you automatically get penalized.
A trust score can look at data across the world and use it to calculate how trustworthy you are in paying back a loan. It looks at elements like benevolence, credibility, ability, history, integrity, reputation and psychometric traits. This is much more than what credit scores look at: primarily financial data. Trust scores are based on real-time data, and so even if you are a new immigrant, the score is based on your entire history. This would allow new Canadians to get credit and be productive much faster, give them confidence and trust and help make them outstanding Canadians.
There are, of course, paradigm shifts we need to factor in, and traditional banks that use the old credit score approach will be hard to convince. It will take months and years to prove that trustworthiness can be calculated and is more relevant than a credit score. However, once that has been done and we have early adopters, we see this trust score catching on quickly.
Trust Science currently has customers in Alberta and wants to work with forward-thinking partners who are ready to give this new way a try. Trust scores can be used for credit decisions as well as hiring, finding trusted partners and a lot more. •
Ashif Mawji is president and co-CEO at Trust Science. The Young Professionals Organization (YPO) member will be appearing at the YPO’s March 1-3 conference in Vancouver.
