Published: July 1, 2015 • Last updated: January 6, 2021 at 8:05 am
High-Quality Credit Score Just As Essential to Renters As Home Buyers
If you have rented an apartment in the past, you know that landlords typically ask you about your credit history. Tenants need a good credit history as much as home buyers looking for a mortgage do.
In fact, we believe all Canadians should pay attention to and proactively manage their credit history.
We also believe all would-be homebuyers and renters should access their personal credit history sooner, rather than later so that any problems can be dealt with in advance of the buying process.
Generally speaking, having bad credit puts you at a disadvantage in many aspects of your life, not just when it comes to finding a home. It could mean:
- Rental accommodations are refused
- Higher insurance rates – home and sometimes auto
- Declined for cell phone contracts
- Mortgage approval may not be possible, or, only at higher rates, bigger down-payment and possibly with fees
- Unlikely to get good deals on car loans and/or leases
- Student assistance (OSAP or student lines of credit) may not be possible
- Cannot benefit from credit card rewards programs
How to access your credit report:
I hate it when someone pulls my credit without asking and when there is a perfectly good alternative. The fastest, most convenient way is you buy your own report online at Equifax. Some landlord corporations may insist they have to pull your credit history on your behalf, but most will be reasonable if you bring along your own copy (provided it is still recent enough).
We prefer Equifax reports to TransUnion reports – they are more widely used and far easier to read.
The worst way is to check your credit is to ask your ‘buddy’ the mortgage broker or a bank employee to check for you – it’s a waste of a ‘hard inquiry’ and will not help your score.
TIP: Online reports are far easier to read than versions you will receive by mail or in-person
Once you have your report in hand, see if any maintenance needs to be done to spruce things up
- Clean up any reporting errors – make the necessary phone calls to respective institutions
- Do not allow anyone to perform ‘hard’ inquiries unless it is absolutely necessary
- Ensure all balances are as low as possible, relative to limits
- Determine if a score boost is necessary
If you are the type who is absent-minded about paying your bills or you tend to bounce cheques every now and then, you may well have a poor credit history. And if you do, you are going to be at a major disadvantage to other candidates for places you might want to rent. Don’t make the number one mistake when it comes to managing your credit history. Being aware and proactive is your best asset.
- Good Credit Hygiene Saves Over $100K On Typical Mortgage
- First Time Home Buyers Ontario: Everything You Need to Buy Your First Home
- How To Stand Out From Other Rental Applicants
- How to stand out from other rental applicants
One of Toronto/GTA's Most Trusted and Knowledgable Mortgage Agents
Ross Taylor is recognized by his peers as one of Canada's pre-eminent difficult mortgage specialists. His ASKROSS blog and column in Canadian Mortgage Trends are focused on the intersection between mortgage financing and personal credit.
With unique dual certification as a licensed credit counselor and mortgage agent, Ross's insights are valued by mortgage professionals and homebuyers alike.
If you have questions about anything financial or mortgage-related, please contact [email protected]. Ross answers everyone personally.
For more information, visit About Ross Taylor.