By: Sameera Islam, Tenant Duty Counsel
In a very competitive housing market, new online tenant registries have appeared that claim to help tenants. These registries offer to report your rent payments to credit reporting agencies, like Equifax, to improve your credit score. However, tenant advocates worry that these online registries might negatively affect tenants’ credit scores, privacy, and ability to get housing in the future.
You may feel that you should give your information to tenant registries to help you get housing. Landlords are allowed to ask about your rent history, income, and credit score, as well as for references. They can only use this information to decide if you are a suitable tenant. Landlords can’t use this information to hurt your chances of renting a place or to hurt your reputation. And, even if your landlord asks you, you don’t have to give your information to a tenant registry.
Many online tenant registries claim to provide significant benefits to tenants – if you make rent payments on time, you may boost your credit score. Over time, you can build a good rent record by paying rent on time every month. This is similar to making credit card payments on time to build a good payment history. While tenant registries might seem to be helpful, they may also have negative results.
Tenants wonder what happens to their credit scores if rent is paid late, say if a cheque bounces or isn’t deposited by the first of the month. Or, landlords may report late payments by mistake or too early, which could also lower a tenant’s score. Registries have not told tenants how they can verify their payment history or correct any mistakes, especially where the tenant is not at fault.
As well, these rent records are available for landlords to review and find desirable tenants – building a list of “good tenants” that can be shared with other landlords. Registries claim that this rent record is good for tenants to make their future rental applications more attractive to landlords. However, tenants who have any late payments or other things on their rent record, may find it difficult to apply for a tenancy in the future, or to get a loan or mortgage based on their credit score.
Privacy is another concern for tenants who may not know how their payment history will be shared by these registries. In 2016, the Office of the Privacy Commissioner of Canada investigated a property management company which improperly collected and disclosed tenants’ personal information, making a “bad tenant” list for a landlord association. The list included tenants who it was said had not paid rent or had damaged the unit. A tenant filed a complaint against the company when their rental applications were rejected because their name appeared on this list. The Privacy Commissioner found that the tenants who appeared on the list did not know their information was being collected for this purpose and tenants could not challenge the accuracy of landlords’ claims. The company was ordered to stop collecting information and destroy the “bad tenant” list.
Tenant registries may have the same effect, by creating a “good tenant” list based on a good rent record. If a tenant doesn’t appear on the “good tenant” list, they could have their rent application rejected by a landlord. Some tenant registries don’t tell tenants how their information may be shared.
As it becomes harder to rent, tenants are right to question what tenant registries really offer. While they could boost your credit score, they may also cause significant harm by targeting vulnerable tenants, affecting your ability to obtain credit or a loan, and interfering with your ability to get housing in the future.
For more information on what a landlord can ask on a rent application, please visit the Steps to Justice website. If you need further help, please contact your local community legal clinic for legal advice.