Why Should You Review Your Credit Score?

by | Jan 29, 2024 | Renters

A credit score is a 3-digit number that represents you and your creditworthiness. It acts as a powerful indicator of your financial well-being, reflecting your habits and level of responsibility. This number can ultimately make or break your chances of renting. In this blog, we’ll cover how credit scores can benefit you during the rental application process and how to maintain a good credit score.

Landlords are allowed to check your credit score, so long as they have your consent. They will either ask you to request a credit report from Canadian credit bureaus – like Equifax or TransUnion – or conduct one independently. With this, landlords are looking for candidates who will pay their rent on time and respect them as well as their property. Specifically, they are looking at your payment history and if you made any late payments. As well, they’re looking for outstanding debts, any claims for bankruptcy, if you have accounts in collections and much more.

The recommended minimum credit score is 660 as that is what’s considered ‘good.’ Having a good score will help you in many areas of your life, especially when looking for your next rental. Here are some specific ways that your credit score can help you.

 

Rental Approval

As mentioned above, landlords will likely check the credit score of any potential tenants as part of the application process. It is used to assess your financial stability and responsibility, helping to determine if you are a good candidate. The higher your credit score is, the better chances you have of being approved for a rental.

 

Negotiating Power

Having a good credit score may allow you to negotiate the terms of your rental agreement. This could be lower security deposits, asking for better terms for the lease or deals on amenities or utilities. With good credit, you are seen as a low-risk tenant, meaning you can be trusted with these added benefits.

 

Access to Better Properties

Some property managers may reserve their better rentals for high-quality tenants. Having a better credit score will provide you access to a wider range of potential options for your next home.

 

Deals on Insurance

Insurance providers will also check your credit score. This will show them how responsible you may be, therefore impacting the cost. Your premium will then reflect how confident they are in your financial responsibility. If you have a higher credit score, you will qualify for a lower rate or premium.

 

How To Get a Good Credit Score

Performing soft credit checks – which are inquiries done by either yourself or a company that doesn’t affect your score – can help you monitor your expenses, pointing out if there are any inaccuracies or issues. To keep a good credit score, make sure you pay your bills on time, in full, and don’t go over your limit. Having too many credit cards can also lower your credit score. If you notice any errors or fraudulent charges, make sure to report them. All these things will help you avoid getting bad credit.