In some provinces and territories, landlords can conduct a credit check to assess a tenant’s credit worthiness in order to determine if they will pay the rent on time.
Knowing your credit rating before visiting the rental property will help you to know ahead of time if a landlord will see you as a good potential tenant.
For this reason, it’s always a good idea to check your file from time to time since mistakes sometimes get recorded.
Find out your credit score
By mail (for free)
How credit ratings are calculated
Your credit rating is a numerical score that reflects responsible credit use. It is calculated each time a lender or potential landlord requests it.
Every time you borrow money and pay it back, your credit file is updated and is used to calculate your credit rating or credit score. Your file also contains information on:
- How you use your credit
- When you make payments
- Where you have lived
- Previous employers
What happens if you don’t have a credit history?
If you have never had a loan or credit card, a landlord will have little or no information to review in your credit file. This makes it harder for them to know the financial risks of renting to you.
If you can, always establish a good credit file before looking to rent by:
- Applying for a credit card (if you don’t already have one). To find out more about how to use a credit card responsibly, visit the Financial Consumer Agency of Canada
- Making loan and bill payments on time.
- Paying the minimum balance on credit cards each month.
Remember, credit ratings will change over time but it can take months or years of demonstrating good credit to fix damages to your credit rating. On average, both positive and negative information will remain on your file for at least 6 years.
Tips for tenants…
First time renter? Credit problems? No credit rating?
Landlords will accept a letter from someone else, called a guarantor, stating that they will assume the risk if you fail to pay rent. A guarantor can be a parent or a close friend.
Bad credit doesn’t have to keep you from being able to rent however. Always get a receipt from your previous landlord as confirmation of your rent payments. Be up front and honest with prospective landlords and show them this history. Knowing that you pay your rent on time is becoming more important to landlords than credit in other areas.
Tips for landlords…
You will need to become a member of a credit bureau in order to have access to a prospective tenant’s credit reports.