For the past eight years Canadians have had the ability to use mortgage payments to build their credit scores. However, for a large segment of the population — including first time home buyers — building a credit score to qualify for a mortgage can be a challenge since rental payment data has not historically been factored in.
Approximately 33 per cent of Canadians pay rent, which for most is the largest single monthly expense. To date, this information has not been factored into an individual’s credit score due to the burden of collecting the data, but the Landlord Credit Bureau is working hard to change that. They have created a portal where Landlords will upload rental payment data which will be provided directly to Equifax, where Landlords will also benefit from the ability to pull a tenant’s payment history data to determine their creditworthiness.
Although this won’t replace the need to build credit in other ways, it certainly is a step in the right direction to break down barriers to entry in the Canadian housing market.
Are you currently renting and thinking about purchasing your first property? Talk to our team today and let us help you find the best path toward owning your own home.