Finding a rental can seem like a competitive sport in many cities across Canada. 

And if you have a less than average credit score, that is just another hurdle that can get in the way of finding a place you want to live. 

Whether you have bad credit because you are or were behind on bill payments, filed a Consumer Proposal, or claimed Bankruptcy,  securing a rental with a low credit score can be challenging.

Landlords typically want tenants who can pay them on time and take care of their property. If you can convince them that you will be a good tenant, finding a rental you love is possible, even if you have bad credit. 

Why do landlords ask for a credit report?  

Landlords use the credit score as a financial scorecard for potential tenants. Your credit score can indicate to the landlord whether you will pay your rent on time and in full. 

Typically, you include your credit report when applying for a rental, or your landlord may ask for your consent to run a credit check. 

A landlord may look at different items in your credit report to decide if you would make a good tenant. 

• On-Time Payments – If you make payments on your credit card and other debt on time, a potential landlord will assume that you are also more likely to make rent payments on time.  

• Debt outstanding – A landlord may take note of the type and amount of debt you have outstanding. For example, they may look at student and car loans more favorably than credit card debt. 
• Collections related to Evictions – Landlords will check to see if any rent-related accounts went to collection on your credit report. Any collections related to a previous rental can be a red flag to potential landlords.
• Bankruptcy and Consumer Proposal – Landlords look at this as caution, but usually look past it, due to the debt having been cleared up, making it easier for the tenant to afford the rent but they will want you to provide proof of stable income. 

Your credit score, along with the rest of your rental application, is part of a potential landlord’s overall decision of whether they rent to you.

What credit score do I need to obtain to rent in Ontario? 

You will likely need a credit score of at least 660, above the average credit score in Canada, to rent. 

Credit scores range from 300 to 900. While there is no set rule on what your credit score should be, the more competitive a rental market is, the harder it will be to rent with a low credit score.

How to find a rental with a low credit score?

Landlords can legally ask for your credit score, but your credit score should not define your ability to rent. 

It is possible to find a rental that fits your needs, even if you have a low credit score. If you think your credit score may get in the way of scoring a good rental, here are a few tips to make a better case for yourself on a rental application. 

Provide proof of financial Stability

A credit score may only be one part of the equation for a landlord’s decision. 

They may also ask for other income as proof of financial stability, such as: 

• Letter from your employer
• Reference letter from previous landlords 
• Proof of income or pay stubs 
• Rent receipts from your last rental
•  A Co-Signer 

These documents can help you make a case as a good future tenant. Be sure to provide these documents upfront, if you can, in a clear and organized manner. 

Search in areas with lower competition

Renting in many of Canada’s biggest cities has become very competitive.  

With real estate, location matters. Often, buildings closer to public transit or within walking distance to amenities are more competitive to rent. 

Try to be strategic with the location of your next home. In areas with less competition, you have a greater chance of convincing a landlord to overlook a low credit score. If you can live outside the city’s main areas, you might have better luck with a less competitive rental. 

Ask your network of friends and family if they know anyone looking for a tenant. Having a personal relationship can increase your chances of a successful rental application.   

Find a guarantor or co-signer 

A property owner’s number one priority is to collect rent on time. If you have a low credit score, potential landlords may assume that collecting rent from you will be a hassle. 

A guarantor or co-signer on your lease with a better credit score can make a stronger application. If you default on rental payments, the guarantor or co-signer essentially agrees to be on the hook. 

A family member or close friend who trusts you can be a guarantor and make a case for you. Of course, make sure to pay your rent on time so that you don’t burn any personal relationships. 

Be Honest about your Circumstances

Landlords are human. If you can explain why you would make a good tenant despite your credit score, they might still rent to you. 

Be upfront about your bad credit and be honest in every other regard on your rental application. 

If you can make a genuine connection and convince them that you will be a great tenant, some landlords may be willing to take a chance on you, even with a low credit score. 

Make your offer more appealing.

Landlords may be swayed if you can make a more compelling offer than other applicants. 

One way is to increase your rental offer if you can afford it within your personal budget. 

If you have the savings and can offer to pay multiple months’ worth of rent upfront, a landlord may overlook a low credit score. 

If you don’t have the means to offer more money, lend a hand in taking care of the property, such as shovelings snow or mowing the lawn if it has one. 

An offer to take care of the property can help make a case for you to be a good tenant, and a potential landlord may look beyond your credit score.

Bad Credit Doesn’t Have to Get in Your Way. 

At the end of the day, landlords want to be paid on time and keep their property in good condition. If you can find other ways to convince a potential landlord that you have a strong application, you can increase your chances of getting the rental you want. 

If debt is getting in your way, EmpireOne Credit can help! We offer credit counselling services to help you find the best solution to deal with your debt and can help you repair your credit. Contact us for a free consultation.