Equifax Reset Credit Scores to Zero in Canada: Consumer’s Battle Reveals Regulatory Gap

David Tregear, a Victoria, B.C. resident, never imagined living debt-free could cause such a huge problem. Over the past year, he’s been fighting Equifax after discovering his credit score had been wiped out — reset to zero without warning or explanation. Suddenly, loans, credit cards, and other forms of credit were denied, leaving him stunned.

What Happened to His Credit Score?

Equifax explains their little-known policy: if a consumer leaves a credit file inactive for a certain period (which they say is two years), the company may deem them “unscoreable” and reset their credit score to zero. Tregear’s last recorded score was around 700, a solid credit rating.

Because he avoided using credit to stay out of debt, Equifax classified his file as inactive and erased his score. The credit bureau refuses to restore it, meaning Tregear must rebuild his credit from scratch — an almost impossible task when lenders rely heavily on that score.

No Clear Rules or Oversight

Unlike banks, which federal agencies regulate, provincial agencies oversee credit bureaus like Equifax with varying rules. Even more concerning, Canadian laws do not govern how companies calculate, maintain, or erase credit scores. This regulatory gap leaves consumers vulnerable.

Consumer advocate Geoff White from the Public Interest Advocacy Centre calls it a “hole in Canada’s consumer protection system.” He says credit scores matter and companies shouldn’t erase them just because a person chooses not to use credit for a time.

The Impact on Consumers

Without a credit score, consumers like Tregear face serious hurdles:

• Loa n and credit card applications get rejected
• Mortgage approvals become difficult or impossible
• Interest rates may skyrocket when credit is granted
  

Tregear’s repeated complaints to Equifax went unanswered, with many closed without resolution. Provincial and federal agencies redirected him back and forth, revealing a bureaucratic maze with no clear path for help.

What Are Credit Bureaus Saying?

Equifax maintains that a zero score is not a sign of bad credit history but merely reflects insufficient data to calculate a score. They also note that differences between Equifax and TransUnion scores are normal due to different algorithms.

However, experts and consumer advocates argue this lack of transparency and arbitrary wiping of credit scores cause real damage and stress for consumers.

Calls for Reform

Advocates urge Ottawa to create consistent national standards by regulating credit bureaus under federal law, like the Bank Act. Clear rules could prevent companies from unfairly erasing credit scores and increase accountability.

David Tregear’s experience exposes a serious flaw in Canada’s credit system—one that many may not know exists until it’s too late. If you don’t use credit for a while, your score could vanish without warning.

More…

• https://www.cbc.ca/news/gopublic/equifax-credit-score-vanished-1.7542059
• https://www.cbc.ca/player/play/video/9.6772458