According to the 2018 Canadian Rental Housing Index, between 2011 and 2016, nearly 753,000 new households were formed with about 396,000 of those rental households. This accounts for 32 percent of the country’s homes. It’s clear that there’s a huge demand for rental housing, which may also result in price hikes in your city, too. Most importantly, rental payments can be expensive and maybe the largest monthly bill you have. But it’s important to have a good rental payment history now more than ever. Especially now that you can learn how to boost your credit score by paying rent.
In the past, if you chose to rent, it meant you missed out on building your credit score. Your mortgage payments are reported to the major credit bureaus in Canada, Equifax & TransUnion. But now, this has all changed. You can now build credit and improve your score using your rental payments. The Landlord Credit Bureau (LCB), is a rent reporting agency that has teamed up with Equifax, one of the two major credit bureaus in Canada, to help renters build their credit scores through rent payments. Let’s learn more.
How Can Landlords Report Your Rent Payments To The Credit Bureau?
As mentioned, you can now learn how to boost your credit score by paying rent. Most importantly, you can use your rent payments to help build a good credit score. To get started using the LCB rent reporting service, you must create a free account first. You don’t need a credit card, and the premium features are optional. Then, you can view your Tenant Record where you will have access to your payment details. You can invite your Landlord to join Landlord Credit Bureaus. Then, they can access your Tenant Record too.
Once both you and your Landlord have joined, you can then initiate Rent Reporting. Most importantly, when you begin making payments a registered trade line will appear on your Equifax Credit Report. Rent would then be treated the same way as your credit cards on credit files. In addition, LCB will report your payments to Equifax. Likewise, you will then be able to improve your score by making on-time positive payments to your Landlord.
That is to say, if you miss payments, and/or aren’t very reliable with making your rent payments to your Landlord, your credit report will reflect this and negatively impact your score. When you sign-up for LCB, it’s important to build a positive rental payment history, to help contribute to good credit and positive credit history.
How Do Rent Payments Help Build Your Credit History And Improve Your Credit Scores?
When you obtain a credit card and begin making payments on it, they are reported to the two major credit reporting agencies in Canada. In the same vein, if you sign-up for an account with LCB, your monthly rent payment will be reported to Equifax.
Your credit report will now have a new tradeline established and each payment could positively impact your credit score. So just like a credit card, if you make your payment on time every month, you will be building your credit history and you will be on your way to a good credit score.
Suggested Blog: TransUnion vs Equifax: What’s the difference? Read now.
Will This Build My Credit Score With TransUnion Too?
The simple answer is no. Currently, rent is only reported to one credit bureau, Equifax. This means that it will not impact your credit scores through the TransUnion credit bureau and may not factor into your credit rating at a bank. Most importantly, relying only on rent to build your credit score is not recommended for a number of reasons.
Tips To Boost Your Score In Canada
Learning how to boost your credit score by paying rent is beneficial, but it isn’t the only thing you can do. As we all know your score is valuable. It helps your potential lenders or creditors decide whether to approve you for financing. Sometimes, it’s a deciding factor on whether your Landlord will rent to you and sometimes a credit check is needed for a new job. We discussed how establishing a rental history as a tradeline will help you boost your score with the Equifax credit bureau. But other than a rent reporting service, what other ways can you establish a good credit history? It’s important to build credit with both credit bureaus, Equifax & TransUnion. To build credit in Canada, there are many ways you can do this. Let’s find out more.
Make Your Payments On-Time
It’s important to note that late payments will always work against you. Whether you have a secured or unsecured credit card, loan or any other tradeline reported to the credit bureau, you must always make your payments on time. Your payment history makes up 35% of your score, so this is an important tip to note.
Watch Your Credit Utilization Rate
Your credit utilization rate is the amount of money you owe against your total available credit limit. So, let’s say you have one credit card with a limit of $3000 and you owe $2500 on it. $3000 is your total available credit limit and $2500 is how much you owe. Credit experts recommend that you should not use more than 30% of your available credit. So, for example, if your credit card has a $3000 limit, you should try not to utilize any more than $900.
Of course, it is often unavoidable to not go over the 30% credit utilization rate. But if possible, try to keep your credit utilization rate low to help contribute to good credit.
Be Cautious When Opening New Credit Accounts
If you apply for a credit card, your score will be negatively impacted. You lose valuable credit points when you apply for credit, even if you gain approval. It’s important to only apply for credit when you need it. Above all, always check your score before you apply for credit, to confirm your chances of approval at the terms you want.
Check Your Credit Report
Sometimes, your creditor may not have the most up-to-date information on your credit file, which may be impacting your score. Make sure to request your monthly credit report from either Equifax or TransUnion to check for any errors. If you spot any errors, you can then file a dispute on your credit report to have these errors removed.
Suggested Maestro Course: How To File A Dispute On Your Credit Report. Enrol Here.
How MyMarble Can Help You Boost Your Score?
With MyMarble Premium’s Score-Up, there is no more guessing on how you boost your score. You will be able to take advantage of MyMarble’s Point Deduction Technology©, point and budget simulators. Our software analyzes your credit report to create a fast and clear path to build your credit.
Likewise, you can follow our monthly recommendations to make a positive impact on your score, giving you confidence for future financial events, all within your budget. In addition, Score-Up provides you with access to your credit report and allows you to track for errors and omissions. MyMarble Premium’s Score-Up will help you build your score in the fastest, most efficient way.
Good credit helps you reach your financial goals. To learn more about how MyMarble can help you, discover how it works here. Our MyMarble plans start monthly, but you can sign up for 3 months to save 10%, for 6 months to save 15% or yearly to save 25%! To find out more details about our MyMarble Subscription Plans, you can visit our website at mymarble.ca/pricing now!