Rent Reporting in Canada: Who, Why and How?
What You Should Know
- Rent reporting enables reporting on-time and late rent payments on tenants’ credit reports.
- Rent reporting allows renters to build their credit score just by paying their rent on time.
- Rent payments can be reported through platforms such as FrontLobby.
- Rent reporting can help reduce rent delinquencies and help landlords screen tenants based on their past records.
Rent reporting refers to reporting a tenant’s on-time and late rent payments to one or more credit bureaus. As the rent payments are shared with the credit bureaus, they are recorded on the tenant’s credit file. This can positively impact the tenants’ credit score if they make on-time payments and negatively impact them if they don’t. Meanwhile, tenants will likely be more responsible with their rent payments, which benefits the landlords.
Who Can Report Rent Payments?
Housing providers such as landlords and property managers, as well as tenants, can report rent payments. Some rent reporting platforms require the landlord's participation, while others allow tenants to report their rent payments without involving the landlords.
A landlord may offer rent reporting as part of the lease agreement and cover the cost of it. They may also pass along the cost of rent reporting to the tenant. Alternatively, tenants may request their landlord to report their rent payments, or they may report the rent payments themselves through a platform that allows them to do so.
Why Should Rent Payments Be Reported?
While mortgage payments are reported to credit bureaus and help homeowners build their credit, rent payments aren’t reported on a renter’s credit report. While rent payments are a significant part of many Canadians’ monthly expenditures, their credit doesn’t benefit from paying their rent on time every month. In fact, many young Canadians and newcomers to Canada face difficulty establishing a credit history.
Rent reporting platforms can help bridge the gap by enabling rent payments to be reported on credit reports. This can help tenants build their credit just by paying their rent on time. Meanwhile, landlords can encourage tenants to be more responsible with their payments by reporting them to credit bureaus.
Listed below are the key advantages of rent reporting for landlords and tenants:
Rent Reporting Advantages for Landlords
- Reduce Rent Delinquencies: Reporting rent on credit report encourages tenants to be more responsible about their rent payments, as not paying rent on time can hurt their credit scores.
- Screen Tenants Based on Past Record: When previous rent payments are reported on credit reports, landlords can screen tenants based on their past payment records and avoid risky tenants.
- Help Other Landlords: By reporting rent payments, landlords can help build tenants’ rental payment history, which can be helpful for the industry as a whole.
- Reduce Evictions: By screening tenants based on their history and encouraging responsible tenant behaviour, landlords can avoid situations where they have to evict a tenant. This can also save them a lot of money, as tenant evictions, on average, cost $11,000.
Rent Reporting Advantages for Tenants
- Build Credit Score: Tenants can improve their credit scores by making on-time payments. A good credit score can help them qualify for loans at lower interest rates and even help them qualify for a mortgage sooner.
- Build a Positive Tenant Record: As reported rent payments are visible on a tenant’s credit report, landlords are highly likely to approve their tenancy applications if they have been paying their rent on time.
Disadvantages of Rent Reporting
- It’s Not Free: As of now, there is no free rent reporting service available in Canada. Rent reporting involves a third-party service that typically has a monthly fee; some even have an additional rent reporting fee.
- Might Hurt Credit Score: Not making the rent payments on time may also negatively impact the tenant’s credit score.
How to Report Rent Payments?
In Canada, landlords and tenants cannot add rent payments to credit report directly. However, a few third-party platforms enable reporting rent payments to credit bureaus. The most popular rent reporting platforms in Canada are listed below.
| Platform | Monthly Fee | |
|---|---|---|
| FrontLobby | Landlords:
| |
| Borrowell Rent Advantage | Subscription fee: $8/mo | |
| Zenbase | Membership fee: $9.90/mo plus 0.75% of rent amount Rent Reporting fee: $1.90/mo | |
| Chexy | Monthly fee:
Credit Builder: $9.99 | |
| City Lending Centers | Monthly fee: $5 or Annual Fee: $60 Set-Up Fee (One Time): $20 24-Month Past History: $120 (One Time) | |
FrontLobby: Through FrontLobby, landlords and tenants can report rent payments to Equifax, which adds rent payments to the tenant’s Equifax credit report and Landlord Credit Bureau (LCB), which maintains a tenant record. Both tenants and landlords can sign up to start reporting rent payments.
If the tenant signs up to FrontLobby to start reporting rent payments, they must draft a lease and invite the landlord to sign up. The rent payments will be reported once the landlord signs up and approves the lease.
Borrowell Rent Advantage: Borrowell Rent Advantage allows tenants to report their rent payments by submitting their lease details and connecting their bank account or credit card used for rent payments to the platform. The renter must log in to the platform and confirm each payment. Once confirmed, the payment is reported to Equifax, helping the renter build credit.
Zenbase: Zenbase offers rent splitting and rent reporting services to tenants. The tenants can opt for a custom rent plan that splits their rent into multiple payments, while Zenbase makes the full rent payment to the landlord on rent day. Those who opt for CreditBuilder must pay an additional monthly fee for their rent payments to be reported to Equifax.
Chexy: Chexy is a platform that offers rewards such as cashback and airline points for paying rent payments using the platform. To do so, the tenant must connect their bank account or credit card to the platform. The rent is charged to the tenant’s credit card or bank account four days before the payment due date.
When a tenant opts-in for Chexy’s Credit Builder, their monthly rent payments are reported to Equifax, the credit bureau. However, this feature incurs an extra cost. The platform also offers a rent-splitting service.
City Lending Centers (CLC): CLC is a rent reporting service that reports on-time rent payments to the credit bureaus as a Tier-1 trade line. The tenant must keep making their rent payments as usual, and CLC will verify each payment and report it to the credit bureaus. Rent reporting through CLC requires the involvement of landlords or property managers, who will have to verify the payments every month.
CLC can also report up to 24 months of your past rental history for a one-time fee of $120.
Canadian Renters' Bill of Rights, 2024
The federal government introduced the Canadian Renters' Bill of Rights in March 2024. One of the proposals of this bill is to amend the Canadian Mortgage Charter to include rental payment history in the calculation of credit scores, intending that paying rent on time should count towards creditworthiness. In the Budget 2024, the federal government announced that it “calls on banks, fintechs and credit bureaus to prioritize launching tools to allow renters to opt-in to reporting their rent payment history to credit bureaus, to strengthen their credit scores and unlock pathways for more renters to become homeowners.”
FAQs
Can I report my rent to credit bureaus?
Yes, as a tenant, you can report your rent to credit bureaus through one of the third-party rent reporting services available in Canada, such as FrontLobby, Borrowell Rent Advantage, Chexy and Zenbase.
Can landlord report unpaid rent to credit bureau?
Yes, landlords can report unpaid rent to credit bureaus through platforms like FrontLobby.
Does rent reporting help credit score?
Yes, reporting rent can help build or improve the renter’s credit score if they make on-time payments. However, if the renter does not make timely payments, their credit score may be hurt.