How Can I Rent Despite Poor Credit?
Property owners evaluate tenants largely on whether or not they will pay rent on time and each month, properly care for the unit, and be a good neighbor. To determine this they look at 3 things:
- They will compare your monthly income to the Rent amount.
- They may do a credit check.
- They may check past references to establish a history of paying rent.
Things to consider:
- Not all landlords will do a credit check or reference check.
- Some landlords only do a “soft” credit check to ensure you do not owe money to other landlords.
- Most individuals or families have outstanding bills such as student loans or telephone bills. Those individuals find housing and do not remain homeless based only on those debts. You can too!
- It is not necessary to disclose your full credit history if asked. State only that you have outstanding bills, but that you have always paid your rent.
- Landlords expect that you may need to pay up to 65 % of your total income on rent.
Some ideas for getting around your credit problems include:
- Make sure the budget works. The money earned must be enough to pay rent and basic needs.
- Provide proof of all sources of income, including any Child Tax Benefit.
- If you are on OW or ODSP, be sure to ask your worker for a letter outlining the maximum income support you are eligible for on a monthly basis. An incomplete income stub is an incomplete application.
- Offer to have the rent paid direct through your social income support, post dated checks, or pre-authorized payments.
- Ensure you have a plan to pay the Last Month’s Rent Deposit and bring verification if possible.
- Target smaller companies or private landlords who may be less likely to check credit or references.
- Rent a place in someone else’s name and you sub-let.
- Find a co-signer.
- Provide a brief explanation of why your credit is poor ie: relationship breakdown or job loss. But assure landlords that you will pay rent.
- Obtain a copy of your credit report so you know exactly what your credit problems are: Transunion.ca or Equifax.com.
- Provide a list of references to vouch for your credibility as a person, such as a boss or community leader, or minister. Try to provide a landlord reference if possible.
- Consider sharing a unit where you would not be on the lease.
- Rent from an Owner, not a Property Management Company or Real Estate Agent.
- Be sensitive in your conversations with landlords. Find one that is sympathetic to your situation as they will be more likely to overlook some credit issues you have had. But be careful to not disclose too much personal information.
- Look in older buildings that may not have all the amenities.
- Be willing to accept a lesser place than you might otherwise.
- Think of it as temporary, as after you establish a track record of paying your rent on time, your landlord should give you a good reference when you move to a nicer place.
- Give out your SIN as not all landlords actually do a credit check. Not providing your SIN could be an indication there is a problem.
- Be polite, on time and appropriately dressed. You only get one chance to make a good first impression.
- You will get many “no’s” before you get a “yes”
- Expect to apply for up to 10 rental units before you get approved.
- You will have to look at more places than the average renter.
Try to clean up your credit as soon as possible. Start rebuilding your credit and have any old information removed from your credit file.