There are currently three companies in Canada that provide customers with an updated credit score, for free, on a regular basis. I recently published a detailed review of two of those companies, Borrowell and Credit Karma, so it was time to add Mogo into the mix.
All three companies offer a wide range of financial products and services. For example, in addition to free credit reporting, you can obtain a credit card, apply for a personal loan, or even a mortgage. In this article, I’ll cover all of the services Mogo offers, to find out how they stack up against the competition.
It’s been said that people who check their credit score more often, tend to have higher credit scores. That’s why services like the ones offered by companies Mogo are so important. Historically, Canadians have had to obtain their credit score directly from the credit bureau, either Equifax or TransUnion. But the process was cumbersome, and for a long time, cost money. Companies like Mogo make the experience much more seamless.
Free Credit Score
When you sign up with Mogo, you’ll receive an updated Equifax credit score, for free, every month. I should point out that you won’t receive a full credit report, just your credit score. Borrowell and Credit Karma provide both a score and a detailed report. This may or may not be important to you, but it’s worth noting.
Mogo makes accessing your credit score extremely easy. When you sign up, they’ll send you an updated credit score immediately, and then follow up every month with an update. This is a great way to see how your score is trending, either up or down. If you notice a drop in your score, you’ll have an opportunity to dig deeper, to find out what might be happening.
Other Mogo Products and Services
With Mogo, you can pay to receive protection against identity theft, and fraud. You can also apply for a personal loan, a mortgage, or a prepaid Visa card. They also have an app that will enable you to buy and sell bitcoin, something that will appeal to a growing number of Canadians.
Identity Theft/Fraud Protection
Mogo helps protect you from becoming a victim of fraud or identity theft, with MogoProtect. For $8.99/month, they’ll send you alerts if they suspect you could be at risk of fraudulent activity. One way they do this is by checking your Equifax credit report on a daily basis, for any new inquiries. Anytime a company does an inquiry on your credit bureau, Mogo will let you know. You can then follow up to make sure the inquiry is legitimate, and stop a fraud attempt before it’s too late. I noticed on their website that they are currently offering this service free for the first 12 months, so it’s definitely something to check out.
Mogo provides members with a crypto exchange, where you can buy and sell cryptocurrency right from your mobile phone. This is a unique service that, to my knowledge, is not provided by either Borrowell or Credit Karma. With MogoCrypto, you can transfer funds to or from your primary bank account very quickly. According to Mogo, funds can be moved in as little as thirty minutes. There is a 1% fee for bitcoin transactions.
Mogo Lending Products
In addition to the services I’ve listed above, Mogo offers a range of credit products, from a prepaid Visa card, to personal loans, even mortgages. Before we proceed, however, I should caution you that the interest rates offered on Mogo loans can be excessive if you don’t qualify for their best rates. Let’s take a closer look.
MogoCard is actually a prepaid Visa card, which means that you’re using your own money when you spend. The advantage here is that MogoCard offers cashback on purchases, which is something you won’t get when you shop using your bank’s debit card.
Mogo also doesn’t charge an annual or monthly fee for the card. The cashback is 1.5% on domestic purchases, and 3.0% on foreign purchases. For example, if you were to spend $1250 per month purchases ($1000 domestic, $250 foreign), you’d accumulate $270 of cash back in one year, which is pretty good for a no-fee card.
MogoCard makes it easy to add funds to the card, by syncing to your primary bank account, thus allowing you to transfer funds online. Currently, all major banks are supported, as well as Tangerine and ATB Financial.
Because the MogoCard is a prepaid Visa, it means that the target market for this card is customers who have less than stellar credit, and aren’t able to qualify for a regular Visa or Mastercard. So, the prepaid option won’t appeal to everyone. But if you have poor credit, or have never had a credit card, the MogoCard is a good option.
Mogo Personal Loans
While Mogo offers customers personal loans ranging from $2,000 to $35,000. Loans can be paid in full, at any time, without any penalties. That said, my recommendation would be to look elsewhere, due to the high interest rates.
While Mogo advertises rates as low as 5.9%, it’s unlikely that the majority of clients will qualify for this rock bottom rate. On the flip side, loan interest rates can be as high as 46.96% for the highest risk borrowers. This is closing in on the rates offered by payday loan companies.
By comparison, Borrowell’s highest loan interest rate is 29.19%, still very high, but nowhere near Mogo levels. Regardless of where you’re shopping for a personal loan, I can’t advise strongly enough to avoid high interest rates at all costs. Here’s an example that illustrates the negative impact that a high interest rate loan can have on your overall financial situation:
$15,000 loan @ 29% Annual Percentage Rate (APR), amortized over 60 months (5 years)
(figures are approximate)
Monthly Payment = $476.00
Interest paid over 60 months = $13,567
Total payments over 60 months = $28,567
Can you imagine? If you used that $15,000 loan to purchase a used car, you could end up paying over $28,000 for the car. At 45% interest, you would pay over $22,000 of interest, and more than $37,000 for a $15,000 vehicle.
So, while I appreciate that companies like Mogo, Borrowell and Credit Karma make credit available to borrowers of all risk levels, there is the potential to get into trouble by taking on a high interest rate loan.
Mogo recently launched MogoMortgage, which is essentially a mortgage broker service. This means that when you apply for a mortgage through Mogo, they will find you find a suitable mortgage, as well as a competitive interest rate, from a leading Canadian financial institution. According to the website, Mogo will do everything from helping you shop for a rate, to handling the documentation.
While the application can be completed online, you can speak with a Mogo mortgage representative anytime you have questions. Currently, Mogo only offers mortgages to clients who have less than 20% of the purchase price available for a down payment, otherwise known as a high ratio mortgage. They also require borrowers to have a minimum credit score of 640, which is pretty standard.
How Does Mogo Compare?
There are things to like about the Mogo product offering. For starters, they make it easy to stay on top of your credit score, with free monthly updates. If you ask me, regardless of which provider you use, this is a service every Canadian adult should take advantage of.
Their no fee, prepaid Visa card, offers a generous amount of cashback and is a convenient alternative for customers who are unable to qualify for a regular credit card, for whatever reason. And if trading bitcoin is your thing, their crypto exchange mobile app is certainly worth looking into.
Overall, while Mogo should certainly be considered a viable option, there are two things that prevent me from recommending them over Borrowell or Credit Karma; the inability to provide customers with a detailed credit report (credit score only), and their apparent focus on high-rate lending to those already having financial difficulties.