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 landlord can obtain credit information about prospective tenants since credit checks are important in the tenant screening process. Here's a summary of the key points:

1. Methods of Obtaining Credit Information:

   • Tenant Screening Services: Online tools like singlekey.com and liv.rent's Trust Score provide credit history, income verification, employment details, court records, and risk assessment.
   • Credit Bureaus: Equifax and TransUnion are major credit bureaus used to access credit information with the applicant's consent.
   • Applicant Purchase: Some landlords require applicants to buy and provide their own credit report.
   • Property Management Companies: Landlords can delegate tenant screening to property management companies.

2. Information Included in a Tenant's Credit Check:

   • Outstanding Debts, Loans, Bankruptcies
   • Credit Score
   • Payment History on Financial Obligations
   • Employment History and Income
   • Court Records
   • Risk Assessment
   • Specific Rental-related Items: Evictions, Court Actions, Unpaid Rent referred to collection agencies.

3. Rental Credit Check Impact:

   • A rental credit check is a hard credit check, which does negatively affect the applicant's credit score.
   • A hard credit check implies a creditor's request for the applicant's credit file.

4. Importance of Credit Checks:

   • Landlords conduct credit checks to assess a tenant's ability to meet monthly rental obligations.
   • Comprehensive tenant screening helps avoid costly and time-consuming eviction processes.

5. Not All Rentals Require Credit Checks:

   • While landlords have the legal right to perform credit checks, not all rentals in Canada necessitate this process.

This information highlights the significance of credit checks in the tenant selection process and outlines the methods and factors involved in obtaining credit information from prospective tenants in Canada.

Tenants choose VIRANI because we offer an exceptional level of service and professionalism in our management of properties. Contact us today for further information.