July: All About Tenants
Credit Scores
Credit scores are one of the single most important aspects that a landlord considers when leasing their property to you. Learn how to build and protect yours.
1. How credit is measured in Ontario?
What exactly is a credit score?
Think of it as your financial “report card.” In Canada—and therefore in Ontario—your score is a three-digit number between 300 and 900 that is calculated from the information in your credit report, a file that tracks how you’ve used credit since you first borrowed money. The higher the number, the lower the perceived risk to a lender or landlord. Canada.ca
Who does the measuring?
Ontario has the same two private credit-reporting agencies as the rest of Canada:
Equifax Canada
TransUnion Canada
Each bureau runs its own proprietary formulas, so your score can differ slightly from one to the other. Lenders and landlords may buy special “tenant” versions that emphasise rental-payment history, but all versions draw on the same raw data. TransUnion
Where does the data come from?
Every month, banks, credit-card companies, telecom providers and other creditors send status updates to the bureaus (for example, balance owed, whether the latest payment was on time). The bureaus load that data into your file; it usually shows up 30-90 days after the creditor reports it. Canada.ca
The five building blocks of your score
Although neither bureau reveals its exact recipe, Canadian consumer-education sites and both bureaus outline the same core factors and their typical influence:
| Factor | Typical weight | What it captures | Why it matters to landlords |
|---|---|---|---|
| Payment history | ~35 % | Have you paid every bill on time? Any late payments or collections? | Missed rent is a landlord’s biggest fear. |
| Credit-utilisation ratio | ~30 % | % of each credit limit you’re using | Maxed-out cards suggest financial strain. |
| Length of credit history | ~15 % | Age of your oldest and average accounts | A longer track record = more predictability. |
| Types of credit (mix) | ~10 % | Revolving (cards, lines of credit) vs. instalment (loans, mortgage) | Shows you can juggle different obligations. |
| Recent “hard” inquiries / new credit | ~10 % | How often you apply for new accounts | Several recent applications can flag risk. |
Weights are drawn from consumer-credit educator Credit Canada’s guide, which summarises Equifax’s model, and align with TransUnion’s own factor list. creditcanada.comTransUnion
Score versions and ranges
Most consumer scores you pull yourself are Equifax Beacon 9 or TransUnion CreditVision, scored 300-900.
Some landlords buy “Tenant Screening” scores that use the same range but give extra weight to rent and utility history (if reported).
A lender, insurer or employer can also buy bespoke scores tuned to its needs—so don’t panic if the number you see isn’t identical to the one a landlord quotes.
Accessing your own file (it’s free)
Under federal and Ontario consumer-protection rules you can order one free copy of your credit report from each bureau every 12 months, by mail, phone or secure online portal. Checking it yourself is a “soft” inquiry and never affects your score.
2. What counts as a “good” score?
| Range | Label | What it means for tenants |
|---|
| 760 + | Excellent | “A-list” tenant—landlords rarely ask for extra security. |
| 725 – 759 | Very Good | Should qualify with minimal scrutiny. |
| 660 – 724 | Good | Acceptable but you may be competing. |
| 560 – 659 | Fair | Expect questions or a co-signer. |
| < 560 | Poor | High risk; you’ll need a solid back-up plan. |
3. Why your score matters when you apply for a rental
Section 10 of Ontario’s Residential Tenancies Act explicitly lets landlords use credit checks when choosing tenants, as long as they apply the same standard to everyone.
A stronger score can mean:
Faster approvals and fewer application fees.
Lower security deposits (in Ontario that’s first + last month’s rent).
Ability to negotiate perks such as flexible move-in dates.
Positive reporting of on-time rent: services like Landlord Credit Bureau now add rent payments to your file, helping you build credit over time.
4. Four proven ways to raise your score
Pay on time, every time. Even one 30-day late mark can drop a score by 90 points.
Keep balances under 30 % of each limit—credit-utilisation is the second-heaviest factor.Canada.ca
Hold on to your oldest card. Length of history counts, so think twice before closing that “starter” account.Canada.ca
Diversify carefully. A low-fee secured card or small-limit instalment loan can add positive trade lines without over-extending you.
5. Common ways Ontarians hurt their score
Maxing out lines of credit during tuition or renovations.
Missing cell-phone payments (yes, carriers report!).
“Rate-shopping” for multiple car loans in a week—each hard inquiry shaves a few points.
Letting parking tickets or small medical bills go to collections.
Closing an old card after paying it off.
Most of these pitfalls link back to myths—see below
6. Credit-score misconceptions (debunked)
| Myth | Reality |
|---|---|
| Checking your own score hurts it | A soft inquiry—like you pulling it on Equifax.ca—has no impact.TransUnion |
| Carrying a small balance “builds” credit | Utilisation matters; paying in full is healthier (and interest-free).Moving2Canada |
| Higher income = higher score | Income isn’t on a credit report; the bureaus only track credit behaviour.Moving2Canada |
| You have one universal score | Each bureau, lender and scoring model can produce a different number.Moving2Canada |
7. Repairing damaged credit
Order your free credit report from both bureaus; dispute any errors in writing.TransUnion
Negotiate with creditors. A “paid in full” or “settled” note is better than an unresolved collection.
Consider non-profit credit counselling (e.g., Credit Canada) before high-fee repair clinics. Counsellors can set up a Debt Management Plan that rolls multiple payments into one and may remove future interest.creditcanada.com
Time heals. Most negative items fall off after 6-7 years; bankruptcies after 7 years in Ontario.
8. Approaching a landlord when your credit isn’t perfect
- Be transparent. A brief written explanation of past issues shows responsibility.
- Show strong income verification (recent pay stubs, T4s) and offer extra references (employer, previous landlord).
- Provide a guarantor or co-signer with good credit if possible.
- Offer a larger rent deposit (permitted up to one month beyond last month’s rent for keys/damage) or agree to pre-authorized payments.
- Demonstrate progress: bring proof of on-time rent reporting or a letter from your credit counsellor.creditcanada.comNick Fundytus
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