Credit Checks – A Necessary Procedure In The Rental Application Process
A landlord must be certain that as a tenant, you will be able to meet your monthly rental obligations. Because the eviction process is an expensive and time consuming process, most landlord and rental agencies invest time and effort into the screening process, and the credit check is a very important component.
In Canada, there are several ways a landlord can obtain the credit information of a prospective tenant:
Tenant screening service – There are online tools such as singlekey.com and liv. rent’s Trust Score that allows quick and easy access to an applicant’s credit history, together with other information such as income and employment verification details, court records, and detailed risk assessment.
Credit bureau – Equifax or Transunion are the 2 major credit bureaus in Canada, and are used extensively to obtain credit information. The applicant must give consent for this type of enquiry.
Applicant – Some landlords ask the applicant to purchase a credit report themselves and provide a copy with the rental application.
Property management company – Busy landlords appoint a property management company to handle management of their properties. The management company uses one of the above methods.
Information that can be included in a tenant’s credit check:
- Outstanding debts, loans or bankruptcies
- Credit score
- Payment history on credit cards, loans, and other financial obligations
- Employment history and income details
- Court records
- Risk assessment
Items in a credit check specifically related to renting, would be evictions or court actions and unpaid rent being passed on to a collection agency to recover.
While a landlord has the legal right to do a credit check, not all rentals in Canada require a credit check. A rental credit check is a hard credit check and does negatively affect the applicant’s credit score, as it means that a creditor has requested to his/her credit file.
Tenants choose VIRANI because we offer an exceptional level of service and professionalism in our management of properties. Contact us today for further information.