{"id":123,"date":"2021-10-15T14:41:31","date_gmt":"2021-10-15T18:41:31","guid":{"rendered":"http:\/\/35.182.98.210\/?p=123"},"modified":"2022-07-25T22:39:07","modified_gmt":"2022-07-25T22:39:07","slug":"for-better-or-worse-rent-can-now-count-toward-your-credit-score","status":"publish","type":"post","link":"https:\/\/frontlobbynews.com\/?p=123","title":{"rendered":"For Better or Worse, Rent Can Now Count Toward Your Credit Score"},"content":{"rendered":"\n

Original Article: https:\/\/moneywise.ca\/managing-money\/credit-score\/for-better-or-worse-rent-payments-can-now-count-toward-credit-scores-in-canada<\/a><\/p>\n\n\n\n

A new service gives landlords \u201cnew sticks and carrots to simply be paid on time.\u201d<\/strong><\/p>\n\n\n\n

TORONTO, ON \/ MoneyWise \/ October 07, 2020<\/strong><\/p>\n\n\n\n

Until now, credit scores have only acted as a roadblock in the renting process \u2014 a test would-be tenants have to pass in order to convince landlords they\u2019re trustworthy.<\/p>\n\n\n\n

But a new initiative from the Toronto-based Landlord Credit Bureau (LCB) is promising to make renting<\/a> an essential part of building up your credit score.<\/p>\n\n\n\n

While the for-profit LCB says it wants to reward tenants who always pay on time, it also wants to create \u201creal consequences\u201d for people who don\u2019t. Here\u2019s what you need to know.<\/p>\n\n\n\n

How does rent reporting<\/a> work?<\/h3>\n\n\n\n
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garagestock \/ Shutterstock<\/figcaption><\/figure>\n\n\n\n

While Canadians have always earned points for paying their credit card bills and other financial obligations, their record of paying rent has historically been excluded from their credit score<\/a>.<\/p>\n\n\n\n

\u201cThere are many renters with poor credit scores who actually have a good record of paying their rent on time, and they have a harder time getting housing because landlords check credit scores,\u201d said CEO Zachary Killam in a recent interview with HuffPost Canada.<\/p>\n\n\n\n

\u201cWe should be giving credit to consumers for paying their rent on time.\u201d<\/p>\n\n\n\n

To do so, the LCB has inked a deal with Equifax, one of Canada\u2019s two main credit bureaus. Landlords can now report their tenants\u2019 payments (or non-payments) to the LCB, which will go to Equifax and end up on their credit report.<\/p>\n\n\n\n

The service is now available in all provinces except Quebec.<\/p>\n\n\n\n

Who benefits from rent reporting?<\/h3>\n\n\n\n
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Iakov Filimonov \/ Shutterstock<\/figcaption><\/figure>\n\n\n\n

Killlam has stated that the new process will be particularly beneficial for new-to-credit and new-to-Canada consumers who tend to have thin credit files and struggle to build their credit ratings<\/a>.<\/p>\n\n\n\n

If you\u2019re interested, you can ask your current landlord whether it would be possible for them to sign up and report your payments.<\/p>\n\n\n\n

But for other tenants, their participation may not be strictly voluntary.<\/p>\n\n\n\n

The LCB, which was originally founded as an online network for landlords and property managers, says it aims to provide both \u201ccarrots and sticks\u201d to ensure landlords get paid on time.<\/p>\n\n\n\n

Its website has clauses landlords can add to their rental agreements, explaining to new tenants that they must consent to their payments being reported to Equifax.<\/p>\n\n\n\n

\u201cNinety-plus per cent of the records we get are positive in nature, so overwhelmingly landlords use this to reward tenants,\u201d Killam said.<\/p>\n\n\n\n

Does rent reporting work?<\/h3>\n\n\n\n
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Dmytro Zinkevych \/ Shutterstock<\/figcaption><\/figure>\n\n\n\n

As a concept, the building of credit through rental payments is not new. In the United States, one\u2019s rent payments can be logged with any number of rent-reporting companies such as Rental Kharma, Rent Reporters or Cozy.<\/p>\n\n\n\n

It\u2019s also not a perfect solution. Remember that:<\/p>\n\n\n\n