Renting in Toronto can be a hair-raising endeavour. Competition for the best apartments and houses in the GTA is high, and rents climb year after year.
Often, landlords in Toronto perform credit checks on prospective tenants. This is so he or she can get a clearer picture of your credit history and assess whether you'll be able to pay the rent each month and pay it on time.
What is a credit check?
Landlords will contact Canada's credit bureaus to see your credit rating. There are three credit bureaus that keep your credit report on file:
Trans Union Canada
Rent Check Credit Bureau
The third bureau has information on tenants' rent payment history and any court judgments passed against the tenant.
Your credit rating is kept automatically. The landlord will see your history of paying your credit card bill and any loans or debts you've had.
What is a credit rating?
Your credit rating is a number calculated based on a score each time you responsibly use credit, such as paying your minimum credit card payment on time, and having a good history of paying rent.
Negative history is also recorded and can reduce your credit rating.
What if I have bad credit or no credit?
If you've never had a credit card, never rented from a registered landlord, never taken out a loan or had any kind of credit in your name, it's possible that you don't have a credit rating.
You could have bad credit if you've missed payments or made late payments on credits or loans in the past.
It can take years of responsible credit use to resurrect your credit rating. Provincial laws set the amount of time information about irresponsible credit use is kept on file, but the general rule is six or seven years.
In that case, it's possible that the landlord might ask for a letter from a guarantor (parent or friend) who could take over your payments if you stop paying rent.
Can I check my own credit rating?
Checking your credit score is important, not only so you know your rating, but also so you can catch any mistakes on your file.
Here's how to contact Canada's credit bureaus:
Consumer Relations Department
Box 190 Jean Talon Station
Fax: 514 -355-8502
Trans Union Canada
709 Main Street W Suite 3201
Tel.: 1-800-663 9980