Landlord Credit Bureau (LCB) and Rental Credit Checks

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Home prices in Canada’s housing market have seen unprecedented growth since the pandemic, and the recent increase in mortgage rates has made home ownership unaffordable for many Canadians. With homeownership seeming out of reach, many Canadians have no option but to rent a home to live in. Meanwhile, Canada has also witnessed a high influx of new immigrants since the COVID-related travel restrictions were eased, and these immigrants have a high tendency to rent. Due to these factors, Canada’s rental market has experienced strong growth over the past two years.

According to the Rental Market Report published by the Canadian Mortgage and Housing Corporation (CMHC) in January 2023, the demand in the rental market increased at a faster pace than the supply in 2022. This pushed the vacancy rate of purpose-built rental apartments down to 1.9%, the lowest since 2001. Many rental apartments are getting multiple offers, and landlords are faced with the challenge of picking quality tenants. Landlord Credit Bureau can help landlords screen tenants by accessing their credit reports, tenant records, and background information. Read below to learn more about LCB.

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LCB is a consumer reporting agency that allows landlords to report rental payments and record the rental history of tenants. The agency facilitates tenant screening by providing landlords with access to tenant records. LCB’s Tenant Database can help landlords make informed decisions by identifying applicants who may have a history of late payments, property damage, excessive debt and other undesirable behaviours.

Tenants can build a positive tenant record by paying rent on time, which can help them get their future rental applications approved. The rent payments are also reported on the tenant’s Equifax credit report, which also helps them improve their credit score over time. This can be particularly useful for students and newcomers to Canada who are looking to build their credit score to gain access to credit products, such as credit cards and residential mortgages.

It is a common practice for landlords to run credit checks on rental applicants to gain insight into their financial health. Having a good credit score and no records of delinquencies on your credit report indicate that you are responsible with your finances, and landlords are likely to see you as a low-risk applicant. Landlords always want to rent out their property to responsible tenants who will make payments on time. Your credit report can be an important factor in determining whether your tenancy application should be approved or not.

Landlords look at several factors in your credit report

1. Credit Score: Credit score is one of the first parameters that a landlord will look at, as having a good credit score is indicative of responsible financial behaviour.

2. Payment History: Your payment history will show if you have a history of late or missed payments, which can be a red flag for the landlord.

3. Current Debt: The landlord will likely compare your monthly debt payments with your monthly income. Having too much debt might lead a landlord to think that you may not be able to fulfil your rent payment obligations, and your application may be rejected.

4. Derogatory Remarks: If you declared bankruptcy in the last few years or have a history of collections noted on your credit report, a landlord may be unwilling to rent out their property to you. Other derogatory remarks that can show on your credit report include consumer proposals, Debt Management Programs (DMP) and liens.

Landlords can get the credit reports of tenants directly from the credit bureaus or through different tenant screening platforms such as FrontLobby, SingleKey and Rentcheck. Landlords can also ask the tenants to provide their own credit report.

There are several ways you can access your credit report, such as directly from the credit bureaus, from your bank (if offered by the bank), or through third parties, such as Borrowell and Credit Karma. Some of these services are free of cost, while others may require you to pay a fee. If your credit score is low, you can take several measures to improve your credit score, such as checking for inaccuracies on your credit report, making on-time payments, and minimizing your credit utilization.

Landlords can report rent payments and late payments to LCB through FrontLobby. Landlords can access the rental data of tenants through the same platform. The tenant screening bundle from FrontLobby includes the Tenant Record from LCB and the tenant’s credit report from Equifax. The report also includes a background check. To see what information you can get from the platform, check FrontLobby’s Sample Tenant Screening Report.

Tenants can request their tenant report for free from LCB by filling out a Record Request Form and sending it to LCB through e-mail or post. Tenants can also create an account on FrontLobby to monitor their lease details regularly, create a positive rent record and report rent payments.

Landlords and tenants can start reporting rent payments by following the steps below.

Landlords can start reporting rent payments in three simple steps:

1. Create an account on FrontLobby.

2. Create a Lease Record.

3. Report rent payments to the credit bureau every month.

Landlords must note that they will have to sign up for a premium plan for the monthly payments to be reported to the credit bureaus. The premium plan includes 20 free leases, and additional leases require extra payment every month.

Tenants can follow the steps below to start reporting rent payments:

1. Create an account on FrontLobby.

2. Open the Record Builder tab, create a Lease Record and send it to your landlord for confirmation.

3. Upgrade to a Plus plan to start reporting monthly rent payments to the credit bureaus.

FrontLobby offers several different pricing plans for both landlords and tenants. While there is a free basic membership option for both, there are some paid plans with a fixed monthly payment available. The pricing plans and their inclusions are explained below.

The three pricing plans available for Landlords are compared below.

Source: FrontLobby

The basic plan is suitable for landlords just getting started, however, it does not include rent reporting. FrontLobby also offers some pay-per-use add-ons to landlords, with pricing as per the table below. The tenant screening bundles offered by FrontLobby include a credit check, background check and tenant record, which can help landlords get all the required information about a tenancy applicant.

Add-Ons Pricing

Source: FrontLobby

Similar to landlords, tenants can also sign up to be a FrontLobby member and pick from the pricing plans below.

Source: FrontLobby

Rent reporting can be advantageous for housing providers, property managers, and landlords in many ways:

1. Choose Responsible Tenants: Housing providers can screen tenants based on their previous rental history, tenant records and credit report. This can help them pick reliable tenants and reduce risk.

2. On-Time Rent Payments: Tenants are likely to be more responsible with their rent payments when they are aware that the payments are being reported to credit bureaus and can affect their overall credit health. Tenant’s debt will reflect on their tenant reports and will be visible to future landlords. Thus, tenants will feel more accountable for timely rent payments and prevent debt.

3. Fewer Tenant Evictions: Tenant eviction can be expensive, costing an average of $11,000 for evicting a tenant. By motivating responsible tenant behaviour, landlords are less likely to run into situations where they have to evict a tenant.

4. Help Responsible Tenants Build a Positive Tenant Record: You can help responsible tenants build a positive rent record and credit history by reporting their rent payments.

5. Help Other Housing Providers: By reporting irresponsible tenant behaviour and delinquencies, you can help other housing providers screen tenancy applications.

Tenants can get the following benefits because of rent reporting:

1. Build a Positive Tenant Record: Tenants who always pay their rent on time can build a positive tenant record, which can help them get their rental applications approved in the future.

2. Build Credit: Rent payments are reported to Equifax, which helps tenants build a credit score. The payments are also visible on the tenant’s credit report, helping them build a positive credit history. Having a good credit score (660+) will give you benefits like access to good credit cards and favourable mortgage rates.

3. Record and Monitor Lease Records: With a platform like FrontLobby, you can record your leases and monitor the records to ensure there are no discrepancies. Regular monitoring will help protect your credit and identity, and maintaining a healthy record will ensure that you are seen as a reliable tenant.

Currently, Equifax is the only credit bureau in Canada that accounts for rent payments in your credit report. Apart from LCB, there are some other platforms that enable reporting rent payments to Equifax.

1. Borrowell’s Rent Advantage program - Rent Advantage is a service offered by Borrowell, which allows renters to sign up and report their rent payments to Equifax for a fee of $8/mo.

2. Dwello - Online rental payment platform offering free credit reporting to Equifax.

3. Zenbase - Zenbase is a relatively new rent payment platform that reports rent payments to Equifax.

Meanwhile, the following platforms offer tenant screening services in Canada:

1. SingleKey - Platform offering tenant reports for $24.99 / Report. The report contains the applicant’s background report, social details, credit report, paystubs, identity verification and more. SingleKey enables automated rent collection and also offers a rental income insurance product called Rent Guarantee.

2. Rentcheck - Rentcheck Credit Bureau was established in 1976 and offers tenant screening services. Their detailed credit reports include Rentcheck tenancy history and consumer credit report, with prices starting at $38 per report.

LCB is a Rent reporting agency that enables reporting rent payments and you can report on-time, late and missed rent payments to the bureau through FrontLobby. FrontLobby facilitates rent reporting as well as recordkeeping. LCB maintains a Tenant Record that includes the payment history of the tenants, including late and missed payments. If the tenant refuses to pay, you can start an eviction process as required in your province of residence.

Yes. Reporting on-time rent payments to credit bureaus can help increase the tenant’s credit scores.

Tenants can request a free tenant record from LCB by filling out a Record Request Form and sending it to LCB through e-mail or post. They can also create an account on FrontLobby to monitor their lease details.