Securing a rental when you have credit issues
If you're in the market for a rental home or apartment, you may encounter landlords or management companies who want to check your credit before approving your application. If you don't have stellar credit, though, there are still ways you can prove your worthiness.
Know your rights
Landlords must get your permission to check your credit, and while they might request your Social Insurance Number (SIN) to assist in checking your credit, you are not required to supply it.
"I do not like seeing the request for the SIN number, which is often asked for by big and small landlords alike," Karen Andrews, intake lawyer at the Advocacy Centre for Tenants Ontario (ATCO), said in an emailed response to questions. "Really, nobody should be sharing their SIN with anybody."
if you have a common name, refusing to share your SIN
could mean that the landlord accesses the wrong person's credit report, according to Scott Hannah, president & CEO of the Credit Counselling Society of BC. And refusing permission for a credit check altogether may disqualify you from getting the apartment you want.
Proving your worthiness
"Most landlords nowadays are checking credit, so I would go in prepared," says Pat White, executive director of Credit Counselling Canada. If you know you're not renewing your lease next year and
will be in the market for a new place, check your credit report now and start working well in advance to clear up any issues such as incorrect information or unpaid balances.
That said, if you're filing a rental application in the future near, that doesn't give you much time to improve your credit.
"A credit report provides insight into a person's financial character, but it doesn't tell the whole story," says Hannah. Here's a look at other steps you can take to demonstrate your worthiness to a prospective landlord.
1. Be upfront. Prepare a potential landlord for what they might find in your credit report rather than giving him or her an unpleasant surprise. "My suggestion is to ... be upfront and transparent about [any credit issues] at the beginning instead of trying to hide something," White says.
Recent immigrants to Canada or university students who
don't have much credit history should explain their situations, she adds. White
suggests giving this simple line: "I need a place to live, but there's not
much history on my credit report because I'm new to Canada or I haven't used
If you have rocky credit history due to a period of illness or unemployment, and you're now getting back on your feet, share that information with prospective landlords as well. Hannah suggests adding a consumer statement to your credit report explaining why you may have collections actions or a bankruptcy in your past and how you're working to bounce back. Someone who's working with creditors and making good on her debts could be a more attractive tenant than someone who's in denial and hasn't made an attempt to clear things up.
2. Line up references. In the absence of a good credit history, references may help make your case to prospective landlords. "Hopefully [you] have a long-standing employment situation, proof of income and even references from a previous landlord," White says. "Something that proves [you're] going to be able to pay [your] rent."
Hannah points out that, often, people with high credit card debt and other financial problems prioritize rent and mortgage over other obligations because they still need a roof over their head.
"A person can demonstrate that, ‘Yes, I've had
some problems, but I've always paid my rent on time and here's proof,'" he
3. Secure a consignor. In some cases, especially with a student or recent graduate securing a first apartment, a landlord might require a co-signer or guarantor on the lease in case the tenant stops making rent payments.
"There might be a parent or someone else that has the ability to co-sign," White says. "You see that often on new credit applications."
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