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When renters are looking to go from a renter to a homeowner, they ask time and time again “Why isn’t my credit score better? I pay my rent every month no matter what, how can that not matter?”

Rent is the biggest monthly expense for those who don’t own their home and paying on time isn’t always easy. Canadian renters often make the active choice between meeting one obligation or another, but the top priority is often rent. The thought is that a roof over your head feels far more important than a credit card payment.

In the past, Credit Bureaus didn’t recognize this responsible behaviour while credit cards and auto loans had weight. Why do a few late Visa payments over several years do damage to a credit report when a decade of on-time rent payments isn’t even considered?

To help renters build credit histories the Landlord Credit Bureau started sharing rent payment data with consumer reporting agency Equifax. By sharing this information, renters’ payment histories carry weight and help to decide whether you have a responsible financial history.

Premier Mortgage president Don MacVicar says: “If one pays $1800 in rent, it would be reasonable to determine that one could afford a mortgage payment and property taxes for the same amount or higher when looking at affordability.”

What can you do to go from renter to homeowner?

Make sure your positive rental history is evaluated by signing up to be a part of the LCB platform. You need your landlord to buy in before any data can be shared. Landlords who take part must register their tenants and report their rent performance – paid, paid late, didn’t pay – every month. Renters have the opportunity to log in, review their tenant records, and dispute any discrepancies or errors.

Responsible tenants are given the option to share their positive rent history. Delinquent tenants, however, will automatically have their information sent to Equifax. This new move helps give the credit bureaus data because if they can see your history of consistent payments, you have a higher chance of becoming a homeowner. If you have a short or non-existent credit history, you can make positive steps to demonstrate your creditworthiness to lenders by paying your rent consistently!



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