4 things you should know about Mogo

Have bad credit? This lender will still give you a loan—but be wary

  11

by

Online only.

  11
(mogo.ca)

(mogo.ca)

—This story was updated on May 12, 2016 after comments from a Mogo spokesperson clarified that their initial free credit check does not impact credit score. Mogo has since revised the section of their website that was unclear on the matter—

You may already be acquainted with some of the financial tech startups that are challenging the world of Canadian personal finance, like Wealthsimple or Mint. Now there’s a new kid on the block named Mogo that has opened up its first brick-and-mortar store in Toronto. But don’t be fooled by this new storefront: It’s not a real bank, but rather a loan lender marketed towards millennials, offering fast and easy loans on its website. So should you trust this well-dressed outsider? “It’s a cool concept and in line with the robo-advisors that have started to disrupt traditional money managers,” says MoneySense Approved Financial Advisor Jason Health. Here’s four things you should know before using their services.

1. You can get your credit score for free with Mogo

A credit score by a credit rating agency would usually cost you around $24, but comes free with Mogo when you sign up for an account. And you’re under no obligation to take out a loan; rather, that credit score will largely determine what amount you can qualify for and what type of interest rate you will be charged. For instance, a poor credit score rating of 500 would qualify you for a sky-high interest rate of 39.99% while a very good credit score rating of 800 would get you the considerably better interest rate of 5.9%.

How your credit score works »

As for whether that credit check will affect your credit score, Mogo claims that checking your rate won’t affect it. However, at the time of publication, Mogo’s FAQ section stated that it “really depends on your credit history.” Mogo has since revised this section to clarify that they do what is called a “soft check,” which has no effect on a credit score. Once you agree to the loan, Mogo then does a full bureau report—known as a hard check—which does impact your credit score.

Soft checks are often used by individuals to check their own credit score, or businesses in order to offer you goods and services. This contrasts a hard check, which does affect your credit score. A hard check will have a greater impact on those with short credit histories or few accounts.

2. Even with bad credit, Mogo will give you a loan—but be careful

What sets Mogo apart from more traditional lenders is that they won’t flat-out deny you a loan based on your credit score. So even those with poor credit scores may still qualify for one of three different types of loans Mogo offers. MogoLiquid is the largest type of loan offered, with amounts up to $35,000 available. MogoMini will grant you up to $2,500, while MogoZip offers an emergency advance loan of up to $1,500.

Debt repayment mistakes you’re probably making »

As a word of caution, those with bad credit need to be particularly careful when taking out a payday loan with MogoMini or MogoZip. Short-term, high-interest loans like MogoZip often cost a sizable chunk in interest charges on top of paying back the loan. Because of that, Heath doesn’t recommend these types of high-interest rate, short-term loans to anyone. But, he says, “at least if they can offer payday loans cheaper than the competitors by leveraging technology, they’re doing a service to Canadian consumers.”

3. Mogo will help you pay off high-interest debt at a lower rate

If, for instance, you’ve got a bank loan with an interest rate of 9%, you may look to Mogo for a loan with an interest rate of 7%. That way you can pay off your higher-interest bank loan with the lower-interest Mogo loan and pay less interest in total, saving you a chunk of change. Heath points out that the “opportunity to pay off higher-rate debt with a lower interest rate option makes sense generally, as long as there are no strings attached.”

How to pay off debt »

4. Mogo’s prepaid Visa cards come with fees

Mogo offers something called MogoCard, which is their fancy name for a reloadable prepaid Visa card. You load it with money in advance, and then use it like a credit card. There’s no interest to be paid on it, and since it’s not an actual credit card, there’s no need to get a credit check to get one.

Cards like these are often touted as a financially responsible way to keep a lid on spending by avoiding debt or overdraft charges—particularly for younger people. But as with most prepaid credit cards, there are still fees attached. For instance, Mogo earns money with their prepaid cards by deducting $1.50 from the prepaid funds for ATM cash withdrawal. While there are no monthly fees or loading fees, if you don’t use the card for 91 days, Mogo charges you an inactivity fee of two dollars per month until your balance is zero.

11 comments on “4 things you should know about Mogo

  1. Add to that a fifth one: Mogo is not available in New Brunswick.

    Reply

  2. Who accepts Prepaid MOGOCARD? Who does not? -In Canada, in USA, elsewhere?

    Reply

  3. Mogo.ca is a bunch of empty promises, a flashy wanna be, with good intentions and no bite.
    I have signed up for mogo, two months ago after I had seen their advert on the TTC subway.
    1 – They advertised and promised for a free secured mogo credit/debit card on signing up. . To this day, I have never got that card, In place of my mogo secured card, when i log into my dashboard, i get an info message that says.”mogo card, we are in beta mode, we are sending out invites, you are on the waiting list”
    2 – They advertised and promised an immediate pre-approval for loans based on your credit score, Its two montsh now, I have not received any pre-approval for a loan, In place of the loan, a permanent error message reads, “Sorry, you are not pre-approved, We are always updating our pre-approval process, stay tuned.”
    3 – They advertised and promised a free equifax credit score, its two months now, I have yet to receive any equifax credit score. In place where my credit score would show, There is a permanent error messages that reads: ” Weird, but looks like the credit bureau doesn’t have any data on your credit. Give Equifax Canada a call at 1.800.465.7166″
    I called equifax, I used my own credit card and bought my credit score info, which I hold in my hand. , I phoned mogo.ca and asked why they seem not to locate me on their website inspite of me provising me SIN number, date of birth and an electronic identity check which is performed by mogo/equifax at signing up, All they could tell me is that they were going to get back to me, I was expecting them to ask me so send some documents etc. They have not done so to this day.
    IT IS BLATANTLY OBVIOUS THAT MOGO.CA HAS BEEN FALSELY ADVERTISING INORDER TO LURE PEOPLE TO SIGN UP WITH BROKEN PROMISES FOR WHICH THEY ARE INCAPABLE OF DELIVERING AS YET. SO WHY DO THEY ADVERTISE FOR SOMETHING THAT THEY STILL DON’T HAVE IN PLACE. WHY DONT THEY INFORM PEOPLE THAT THESE SERVICES ARE YET TO COME. IN THAT WAY, I WOULD NOT HAVE WASTED MY TIME SIGNING UP. IT IS PRACTICALLY A SCAM, WHEN A COMPANY LURES NEW CLIENTS WITH PROMISES THAT THEY CANT DELIVER. AS OF YET.

    Reply

    • Re: Dissapointed eboony…This is exactly what happened to me and now, since they are of no help to me, I can’t even close my account with them!

      Reply

    • Hi Dissappointed eboony……don’t worry you’re not the only one experiencing this scenario with Mogo. I went through exactly the same thing as you did. At this point who really cares anymore. I bank with TD and their ATM cards is also a Debit Visa which most if not all businesses are accepting as a method of payment. It’s instant and no fees involved. RBC has a similar plan except they separate their cards in two. I know how you feel as I was counting on using Mogo Visa but found I had to purchase other pre-paid cards since Mogo is not rocking the boat faster than they should be. My best suggestion is check around as Mogo Visa is not the only one out there. Always be careful with FEES.

      Reply

    • Mogo has done exactly as advertised for me, I’m not in the market for their credit/debit card or loans just a to watch my credit score which they have done with no problems. Well worth the free sign up A+++++++

      Reply

    • I signed up and have been waiting for a card as well, but i get monthly credit scores which is nice. sorry you are having a bad experience, though there is others out there as well. that do the same i tried borrow which give a free credit score every 3 months or so. from trans credit i believe

      Reply

      • its borrowell and its with equifax as well

        Reply

  4. They sell your data. I signed up to check my credit score the next day I started getting spam text messages on my phone.

    Reply

    • I,ve never got any spam, so im not sure what your talking about been with them for almost a year.

      Reply

  5. interest more than 45%???????? How many losers pay that?

    Reply

Leave a comment

Your email address will not be published. Required fields are marked *