Tenant rights and responsibilities - credit check information

Almost all landlords first run a credit check on prospective tenants in order to make sure that they can consistently pay their rent on time and are not a risk or liability. It is important that you know all about the credit check a prospective landlord will do when you are applying for a rental property of some kind.

There is a record of your Credit History

When you start to borrow money and pay it back, you develop a line of credit that goes into your official file. This file contains all information pertaining to your credit history, including outstanding debts. Credit bureaus are responsible for maintaining people’s credit files, and the information they get about your credit from banks, credit card companies, and other places, ultimately goes into your file, whether it is good or bad. In Canada, there exists two different credit bureaus, and they are Equifax Canada and Trans Union Canada. There is also Rent Check Credit Bureau, which is essentially a credit bureau for the housing industry, getting information about tenant payment histories from landlords.

How your Credit Rating Works

It is important that you understand how your credit rating works when you are going about applying for rental properties. There is a certain formula used to calculate your credit score, and the information in your official record is used as an integral part of it. You can earn more points and improve your credit rating with responsible credit use. There are three primary systems, including Empirica, FICO Score, and Beacon, that can be used to calculate your credit score. The system that is ultimately used to calculate your credit score depends on the bureau that issued your file in the first place and who is going to use it. A vast majority of banks tend to use an Empricia score, and a FICO score is a credit rating that typically comes from Equifax for people who want to monitor their own credit ratings.


No Credit History isn’t always better than a bad history

If you do not have any kind of credit history, whether it is a loan or a credit card, it can definitely work against you and be just as bad as having a poor credit rating. This is precisely why it is so important that you make a point of establishing a line of credit as soon as possible to avoid missed opportunities for things like loans and rental properties. Anyone who is renting for the first time or has a history of credit problems as well as people without a credit rating of any kind might want to look into getting a guarantor’s letter, which usually comes from a parent or other family member who assumes responsibility in the event that you cannot fulfill your financial obligations.

How do I achieve a high Credit Rating?

There are a number of ways to ensure that you maintain a high credit rating, including making a point of paying all of your bills and loans on time each month. Credit card debt can take a hugely negative toll on your credit, which is why it is so important that you make all of your payments on time. When you miss payments on a consistent basis, it begins to lower your credit rating. A person’s credit changes over time, whether it is for the better or worse, depending on the decisions they make when it comes to paying their bills.

How long does negative information stay in my credit file?

The length of time that negative information, such as late payments our outstanding debts, stays on your credit file depends on the credit agency and their policies. Typically, negative information stays with a person in their credit file for around six or seven years, and this applies to positive things as well. Things like late credit card or loan payments as well as court judgments are usually removed from a person’s credit record after a period of about six years. When it comes to court judgments though, Prince Edward Island is a bit different, as it takes seven years after the judgment amount has been paid until it is wiped from the person’s record.

The Importance of Checking your File

Sometimes there are errors and omissions that occur with credit reports, which is why it is important that you take the time to check your credit file once in a while to make sure that nothing positive that should be in there is missing. If you do find that something positive is missing, you will have to get proof of it before it is officially added to your credit report. All factual information in your file cannot be changed, as it is only false information that is edited or removed. Make sure that you contact the appropriate credit bureau immediately if you find that there is something in your file that should not be there or any of the information in it is not correct. If a missed payment when on your record but there was some kind of accident or mix up, the credit bureau might be willing to put in a note in the file explaining what happened.

Take a close look

Take the time to look over everything that is in your credit report so you can confirm that there is no erroneous or missing information. The contact information for Trans Union and Equifax Canada, both of which represent your credit file, can be reached at:

Equifax Canada
Consumer Relations Department
Box 190 Jean Talon Station
Montréal, QC
H1S 2Z2
Tel.: 514-493-2314
Fax: 514 -355-8502

Trans Union Canada
Consumer Relations
709 Main Street W Suite 3201
Hamilton, On
L8S 1A2
Tel.: 1-800-663 9980
Fax: 905-527-0401

Request for References

Besides running a standard credit check on you, a prospective landlord might also ask for references from some of your past landlords so as to get a better idea of how reliable a tenant you will be. Although a credit check and income information will provide the landlord with a good idea as to what your financial history and current situation is like, they could want to get information from other sources as a way of confirming that you are not a liability.