About one-third of Canadians were renters in 2021, a number that appears to be growing. Given how many people make rent payments every month — which is one of the biggest single payments households make — it would help if these payments contributed to building credit. That’s where the Landlord Credit Bureau (LCB) comes into the picture.
With the help of the Landlord Credit Bureau (LCB), every timely rent payment you make will help you build your payment history.
Let’s take a closer look at the LCB and how it can work for you as a credit-building tool.
What Is The LCB?
The Landlord Credit Bureau (LCB) is a credit reporting agency in Canada that reports rent payments to the credit bureau.
Timely rent payments reported will help you build a positive payment history which can help boost your credit score. It’ll also help you develop a positive tenant record that future landlords can use to screen you. That way, you can show future landlords that you’re both a responsible renter and have a strong credit score, which can help you remain competitive when looking for a place to rent.
LCB Landlord Benefits
Landlords can take advantage of the services of the LCB in several ways, including the following:
Cut Down On Payment Delinquencies
Knowing that landlords are reporting rent payments to the credit bureaus helps nudge tenants to be more accountable for their rent. In fact, according to the LCB, landlords often see missed rent payment delinquencies drop by 36%. This can save landlords a lot of time, hassle, and money that otherwise would be spent going after tenants for missed rent.
Fewer Tenant Evictions
One of the main reasons why tenants get evicted is because of failure to make rent payments. As mentioned, having rent payments reported to the credit bureaus can drastically reduce delinquencies, and in turn, cut back on evictions.
Note Outstanding Debts
Landlords can use LCB’s tools to track rent payments, both past and present. If there are any unpaid rent payments by the tenant, it will remain in their tenant record. This, in turn, will encourage tenants to improve their rent payment activity and deal with their rent debt appropriately.
Landlords can use on-time rent payment reporting as a type of reward for their tenants for being responsible with their rent. The incentive for tenants is that they can gradually build a positive payment history which may help increase their credit scores.
Establish A Payment Plan
The LCB encourages landlords and tenants to come up with a rent payment plan when rent debts are owed. With a payment plan in place, the debts will be reported as rent paid on time. Only if a tenant stops making payments according to the plan, the landlord will report the debt to the bureau.
LCB Tenant Benefits
Not only can landlords benefit from the LCB, but so can tenants. Here are some perks that tenants can benefit from:
Use Your Rent Payment To Build Your Payment History
If you’re currently renting, you can use your timely rent payments to improve your payment history which may help increase your credit scores. If you have bad credit and need to make some improvements, building a positive payment history may help. This is because your payment history is a common factor used in the calculation of your credit scores.
Increase Chances Of Getting Approved For A Loan
Your credit score can have an impact on your ability to secure a personal loan. Many lenders use it as a means of determining your creditworthiness. Generally, a high credit score can help improve your odds of securing a loan and qualifying for a lower interest rate. This can help you save money in interest payments over the long run.
Keep Tabs On Tenant Records
Tenants can reach out to the LCB for a copy of their tenant records to make sure all reported information about rent payments is accurate and up-to-date. This is important to do to ensure the information reported to the credit bureaus is accurate.
Moreover, future landlords that pull up your tenant record will see this information, which can impact their decision to rent to you. A more positive tenant record will make you a more desirable candidate. Depending on the rental market, there can be plenty of competition among prospective tenants all vying for the same rental property. Tenants can stand out from the crowd with a high credit score and positive tenant record,
Can You Check Your Credit Score With LCB?
While you can’t check your credit score with LCB, you can use Loans Canada’s free online tool. Knowing what your credit score is will give you a clear picture of where you stand in terms of your ability to get approved for a loan, what type of rates you can secure, and which lenders to apply with.
How Does LCB Work For Tenants?
If you’re a tenant, follow these steps to start using your timely rent payments to build good credit with the LCB:
The LCB accepts rental history information from FrontLobby, an online platform that works with credit bureaus. You can sign up for free and create a Lease Record. Then, send an invite to your landlord.
What Should Landlords Do When Tenants Send An Invite?
When a landlord receives an invite from a tenant through FrontLobby, they can create their own account. It’s free and only takes a few minutes. Landlords can then log in to their accounts to view their tenant’s lease draft, then approve it if everything looks good.
Pay Your Rent On Time
Keep paying your rent on time each month to improve your tenant record and have your on-time payments reported to Equifax.
Each rent payment you make will be reported to Equifax which can help build a healthy payment history. This, in turn, may have a positive effect on your credit score.
How Much Does It Cost To Use LCB?
You can use the LCB service through FrontLobby for free, but you can unlock additional features for a small monthly fee.
The Basic Plan
The Basic plan is free to use and allows you to record and track your lease details and share them with your landlord. However, your payment won’t be reported to a credit bureau and won’t have any effect on your credit score. You also won’t build a positive Tenant Record with Landlord Credit Bureau.
The Plus Plan
For $4 per month, you can participate in the Plus plan, which comes with the same perks as the Basic plan, with additional features:
- Build a positive Tenant Record with Landlord Credit Bureau
- Rent payments will be reported to Equifax, which may help improve credit.
Final Thoughts On LCB
The LCB is available to help both tenants and landlords alike. Tenants can create verified tenant records and have their on-time rent payments reported to the credit bureaus to build good credit and establish a positive tenant history. Landlords can also use the LCB to screen prospective tenants and encourage renters to meet their rental deadlines.