Credit bureaus are testing the inclusion of rent payments in credit scores, saying it's a positive move launched by Ottawa. But critics fear the move could compound the issues faced
Credit bureaus are testing the inclusion of rent payments in credit scores, saying it’s a positive move launched by Ottawa. But critics fear the move could compound the issues faced
I feel there should be a freeze period, like if you miss 1 payment due to paycheck delay or something would make sense, if you miss 6mo of payment there’s probably a problem.
I don’t think it’s been announced exactly how this will work but in general nothing is reported to credit bureaus until it’s at least 30 days past due. So it’s not like being a week late paying your rent once is going to trash your credit score.
And yeah, if you’re more than a month behind on rent that seems like it’s probably a bad sign for your creditworthiness?
Except that credit scores have 0 interest in whether they’re fair to the person being scored. They are profitability scores for potential lenders to evaluate doing business with someone. To that end, a lender won’t care if you had a legitimate grievance against the landlord. Withholding rent even through escrow for lease violations is still likely to be viewed as problematic behavior and they wouldn’t want to risk you doing the same to them.
Afaik, you can’t just decide to withhold rent when there’s a dispute. This would give landlords an enforcement tool other than suing and eviction, though, since that is necessary to get that enforced.
Credit bureaus are testing the inclusion of rent payments in credit scores, saying it’s a positive move launched by Ottawa.
Translation: The 2 private companies that monopolize peoples credit ratings says they’re very happy that the federal government pushed even more business and influence their way.
Lol two greedy companies who don’t have to actively do anything nor take accountability for any neglect on their part are of course happy to get more data and data points for nothing. Color me surprised.
What I don’t understand is how people are completely complacent with this solution which is supposed to make housing more attainable.
As a country we are not new to dealing with loans, credit, nor credit history. The system has been around for a long time.
The problem is not people having too poor of a credit score or thin of a credit history to be able to obtain a mortgage from a bank. It’s the basic fact that if you’re Canadian you are going to be fucked financially in at least 3 different ways at any given time.
To simplify I know companies will never pay employees what they are actually worth. It’s a nonsense game of carrot or crop. But if the cost of living wasn’t so high it makes reaching for a dream easier.
Now back to this rent reporting program. Who is this program actually for? Its not for people with an established credit/loan history. For people that currently have bruised credit, adding rent payments to it isn’t going to help in any way. Going to take 7 years for whatever that bruised the score to fall off regardless of whatever it was.
Since credit scores are intended to quantify risk to potential lenders, I would assume that missing rent payments is definitely not a good sign to that end
I think there is also upside here by formally allowing renters to positively affect their credit history through consistent renting.
Homeowners and credit card owners can improve their credit via consistent payments, why not renters?
(Yes, I do know there are ways to have your lease impacting your credit but they aren’t a default and many renters would benefit from the credit boost this could enable)
I agree completely. Though any debt of any sort has the ability to affect your credit, at least in the USA. A judgement entered against you for a debt can be reported (or detected by) credit rating agencies which will adversely affect your credit.
No missed rent payments affecting credit score unless/until rent payment history can qualify you for a mortgage.
Rent payments can and should prove financial ability to service a mortgage, and it’s high time we gave people this tool. Rent will always be more than a comparable mortgage, so disregarding this financial history is punishing the poor for the crime of poverty.
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I feel there should be a freeze period, like if you miss 1 payment due to paycheck delay or something would make sense, if you miss 6mo of payment there’s probably a problem.
I don’t think it’s been announced exactly how this will work but in general nothing is reported to credit bureaus until it’s at least 30 days past due. So it’s not like being a week late paying your rent once is going to trash your credit score.
And yeah, if you’re more than a month behind on rent that seems like it’s probably a bad sign for your creditworthiness?
Unless you where having a dispute with the landlord and where withholding rent for some reason.
Except that credit scores have 0 interest in whether they’re fair to the person being scored. They are profitability scores for potential lenders to evaluate doing business with someone. To that end, a lender won’t care if you had a legitimate grievance against the landlord. Withholding rent even through escrow for lease violations is still likely to be viewed as problematic behavior and they wouldn’t want to risk you doing the same to them.
Afaik, you can’t just decide to withhold rent when there’s a dispute. This would give landlords an enforcement tool other than suing and eviction, though, since that is necessary to get that enforced.
Translation: The 2 private companies that monopolize peoples credit ratings says they’re very happy that the federal government pushed even more business and influence their way.
For anyone wondering. If you wish to make a complaint, contact your provincial or territorial consumer affairs office. The federal government doesn’t regulate credit bureaus.
Lol two greedy companies who don’t have to actively do anything nor take accountability for any neglect on their part are of course happy to get more data and data points for nothing. Color me surprised.
What I don’t understand is how people are completely complacent with this solution which is supposed to make housing more attainable.
As a country we are not new to dealing with loans, credit, nor credit history. The system has been around for a long time.
The problem is not people having too poor of a credit score or thin of a credit history to be able to obtain a mortgage from a bank. It’s the basic fact that if you’re Canadian you are going to be fucked financially in at least 3 different ways at any given time.
To simplify I know companies will never pay employees what they are actually worth. It’s a nonsense game of carrot or crop. But if the cost of living wasn’t so high it makes reaching for a dream easier.
Now back to this rent reporting program. Who is this program actually for? Its not for people with an established credit/loan history. For people that currently have bruised credit, adding rent payments to it isn’t going to help in any way. Going to take 7 years for whatever that bruised the score to fall off regardless of whatever it was.
Since credit scores are intended to quantify risk to potential lenders, I would assume that missing rent payments is definitely not a good sign to that end
I think there is also upside here by formally allowing renters to positively affect their credit history through consistent renting.
Homeowners and credit card owners can improve their credit via consistent payments, why not renters?
(Yes, I do know there are ways to have your lease impacting your credit but they aren’t a default and many renters would benefit from the credit boost this could enable)
I agree completely. Though any debt of any sort has the ability to affect your credit, at least in the USA. A judgement entered against you for a debt can be reported (or detected by) credit rating agencies which will adversely affect your credit.
That’s fine.
Torches and pitchforks will do even more damage.
No missed rent payments affecting credit score unless/until rent payment history can qualify you for a mortgage.
Rent payments can and should prove financial ability to service a mortgage, and it’s high time we gave people this tool. Rent will always be more than a comparable mortgage, so disregarding this financial history is punishing the poor for the crime of poverty.