HOW CAN CANADIAN RENTERS MAXIMIZE RENT REPORTING SYSTEMS?
Rent reporting can “substantially benefit” the financial well-being of Canada’s renting households, according to industry players.
Among the earliest adopters of rent reporting in Canada is a collaboration between FrontLobby and Equifax Canada, which started a rent reporting program in 2018.
An analysis by Equifax Canada of FrontLobby consumers showed that an estimated 48% of renters who used their platform can get credit scores generated based solely on their reported rental data.
“This means that nearly half of renters with FrontLobby have only rental information and no other credit accounts listed in their Equifax credit report,” the analysis stated. “If these individuals stopped reporting through FrontLobby, they could become credit invisible over time unless additional credit is procured and reported to Equifax.”
“Individuals that are credit invisible or have limited credit information on their file may have difficulty accessing credit products and housing and may pay higher interest rates which can perpetuate a cycle of financial stress,” the analysis added.
Equifax argued further that credit payment history on a renter credit profile “is often one of the most important factors that determines credit scores.”
“Financial institutions and housing providers commonly use credit scores to verify a renter’s credit-worthiness,” the analysis said. “Renters with low credit scores may be less likely to qualify for credit cards, mortgages, and loans at competitive rates or be selected for the rental property of their choosing.”
Story by: CMP