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Mortgage payments are generally reported to the credit bureaus, so why not rent payments? Considering how rent can be just as expensive as mortgage payments, it only seems fair that renters have the same advantages as homeowners when it comes to rent reporting.

Canada is in the midst of a housing affordability crisis. Not only are many Canadians unable to get approved for a mortgage due to soaring housing prices and mortgage rates, but many renters can’t even afford rent. 

Today, the average price for a home in the Greater Toronto Area (GTA), for instance, is $1,146,500. Toronto’s average rent for a 1-bedroom unit is $2,500 per month. Add an extra bedroom, and the price jumps to $3,299. Imagine paying thousands of dollars in rent every month and not being able to take advantage of credit-building opportunities that homeowners get.

While credit reporting traditionally excluded rent payments, Canada has introduced a relatively new concept that utilizes rent reporting to enhance credit.

Read on to find out how your rent payments can help build strong credit through rent reporting. 

Can You Report Your Rent To The Credit Bureaus?

Yes, you can have your rent payments reported to the credit bureaus through certain third-party service providers. Your landlord must also be willing to report your rent payments. 

Ways To Build Credit With Your Rent Payments

A handful of rent reporting services are available to help you build a strong credit profile through rent payments. Some of these services will facilitate the process of having your rent payments reported to the credit bureaus. With every timely payment, your credit score may gradually increase over time. All these services design credit-building programs to assist Canadians in establishing credit without needing a conventional credit card or loan product.

Here are some rent reporting and credit building services to consider:

City Lending Centers (CLC) 

City Lending Centers was founded by Ben and Margaret Adekunle who use their backgrounds in IT Project Management and banking to help families work through their financial struggles. The service provides personalized online credit-building solutions to help each individual establish a good credit history.

Rent Payment Reporting 

Among the various credit-building products and programs offered by CLC is their rent payment reporting service. As a tenant, you can use your timely rent payments to help build a healthy credit score. 

The cost of the program is $5 per month or $60 per year, plus a $20 set-up fee. Landlords must participate in the program since they will be verifying rent payments. CLC will contact your landlord to verify your rent payment and then report it to the credit bureaus. Your payment will be reported as a Tier-1 Trade Iine by the credit bureau. 

How it works:

  • Enroll in the program using your name, contact information, government ID, and monthly rent amount. 
  • CLC will reach out to your landlord for rent payment verification, and then they will upload your information to Equifax.
  • Your credit report will note your rent payments.

Chexy

Chexy is a Canadian credit-building service that allows you to pay your rent using your credit card. This lets you use one of your biggest monthly bill payments to build good credit, as long as you make your credit card payments on time. 

Plus, paying your rent with your credit card lets you earn cash back rewards. Landlords don’t typically accept credit card rent payments, so Chexy will serve as a middleman between you and your landlord: your landlord gets paid, and you get to cover your rent the way you want to.

How it works:

  • Create your Chexy account using your full name, email address, and password.
  • Upload your lease and enter your rent amount and due date.
  • Connect your credit card to your account.
  • Chexy will charge your card and e-Transfer your landlord to ensure your rent is paid on time.
  • Earn points without requiring your landlord to participate.
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Landlord Credit Bureau (LCB)

The LCB is the rental housing industry’s credit bureau and a credit reporting agency that accepts rental history information from tenants and allows landlords to access this data to screen prospective renters. 

Tenants and landlords can access tenant information through FrontLobby, a digital platform that works with credit bureaus. The LCB benefits tenants by allowing their rent to be counted toward their credit score calculations, and it benefits landlords by helping them screen potential tenants.

How it works:

  • The LCB accepts rental history information through the FrontLobby platform.
  • You can sign up for free and create a lease record.
  • You then send an invitation to your landlord, who then creates their own account.
  • Landlords can view and approve their tenants’ lease drafts.  
  • Your rent payments will be reported to Equifax by your landlord, and your tenant record will continue to improve with every on-time rent payment you make.

Renting And Your Credit Score As An Immigrant

Landlords often perform a soft credit check on your credit file to vet you as a renter. They want to make sure that you will be able to make your rent payments on time every month, and your credit score is an indication of your financial habits. 

But as a newcomer to Canada, you may not have any credit because your credit history from back home does not apply to Canada. Thankfully, there are services like Nova Credit that can solve this problem.

Nova Credit 

Nova Credit is Canada’s first cross-border credit bureau that helps immigrants access financial products that they otherwise would be excluded from in the conventional credit system. Lack of access to credit has long been a hurdle for immigrants, and Nova Credit is helping to break down these obstacles by translating credit histories from specific countries to help newcomers get approved for credit products.

Nova Credit does not do rent reporting. Instead, it is focused on helping newcomers qualify for basic financial products, such as credit cards, car loans, or cell phone plans. Once you get an apartment in Canada, you can use one of the above-mentioned services to start building credit. 

KOHO – Another Alternative Way To Build Credit 

KOHO is a fintech company that offers services and products designed to help Canadians establish and build a strong credit history. In turn, this will provide consumers with access to more financial products in the future.

Credit-Building Program 

KOHO’s Credit-Building program includes a line of credit that helps Canadians build and improve their credit profiles. When you enroll in this program, KOHO will open a “line of credit” for you. However, you won’t be able to withdraw money from this account. Instead, KOHO will deduct a small fee from your KOHO account (which you’ll need to create) and report it to Equifax as a payment.

While opening a KOHO account is free, the Credit-Building program costs either $5, $7, or $10 per month, depending on the account.

How it works:

  • Open a KOHO account for free or a fee and deposit money into it.
  • Add the optional Credit-Building tool to your premium KOHO account.
  • KOHO will conduct a “soft pull” of your credit file (which won’t impact your credit score).
  • Funds are withdrawn from your account each month And reported as payments to one of Canada’s credit bureaus to help you build good credit.

Benefits Of Rent Reporting

There are a few key advantages to using rent reporting services:

  • Build good credit. Achieving strong credit requires a history of making timely bill payments. In addition to paying your utility bills, cell phone bills, and car loan payments on time, adding timely rent payments can be a great way to build a solid credit history. 
  • Gain access to low-interest credit products. With good credit, not only will you increase your chances of getting approved for credit products, but you’ll also be able to secure a lower interest rate. This can help save you a considerable amount of money, particularly on high-interest credit products. 
  • Incentive for making on-time payments. Knowing that your rent payments will be reported to the credit bureaus may incentivize you to pay your rent on time each month. This may help you develop healthy financial habits. 

Final Thoughts

If you’re a renter and are struggling with bad credit, consider using your rent payments as a way to boost your score. If you make your rent on time every month, then consider taking advantage of rent reporting services to use those timely payments to build a healthy credit profile.

Rent Report FAQs

What is rent reporting?

Rent reporting involves reporting rent payments to credit bureaus to help tenants build healthy credit histories and boost their credit scores. 

Is there a fee for rent reporting services in Canada?

Most rent reporting services charge a fee, whether on a monthly basis or as a one-time start-up fee.

Can rent reporting negatively affect my credit score?

Yes, rent reporting could hurt your credit score if your payments are late. Since rent payments are reported to the credit bureau, timely payments can boost your credit score, while late or missed payments can have the opposite effect.  

Can I report past rent payments to improve my credit score?

Yes, some rent reporting services may give you the option to report past rent payments. 

Which credit bureaus accept rent reporting in Canada?

What is a good credit score for qualifying for a mortgage?

A credit score between 620 and 680 is required to get approved for a mortgage, depending on the lender.

Lisa Rennie avatar on Loans Canada
Lisa Rennie

Lisa has been working as a personal finance writer for more than a decade, creating unique content that helps to educate Canadian consumers in the realms of real estate, mortgages, investing and financial health. For years, she held her real estate license in Toronto, Ontario before giving it up to pursue writing within this realm and related niches. Lisa is very serious about smart money management and helping others do the same.

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