Introduction

As a landlord or a property manager it is very crucial to find a reliable tenant and here tenant credit check can help you. Credit reports give you a deeper insight into your potential tenant’s financial habits and history.  In other words, it helps you make informed decisions, reduce risks and protect your property. In this guide we’ll cover what a credit check is and why it matters. Also, we’ll discuss what’s included in a report and how much a tenant credit check report costs in Canada. 

What is Tenant Credit Check  

Tenant credit check is the process of screening your future tenants. It provides valuable insights into your tenant’s credit background. Tenant credit checks can be a good indicator of their trustworthiness as your future tenants. It goes beyond looking at a credit score and gives you access to detailed financial history that shows how consistently a tenant pays bills, whether they have debts or have undergone bankruptcy. This information helps you understand how your potential tenant managed their financial obligations in the past and indicates how reliable they may be with future rent payments. 

Why is It Important to Run a Tenant Credit Check Before Signing a Lease Agreement 

Finding tenants that pay the rent on time, take care of the property and respect the lease agreement are the challenges that landlords and property managers face. Yet finding a tenant who has no rent debt is even harder. That’s why it is essential to run a credit check before signing a lease agreement.  

Of course, your rental property is your biggest investment, and it is risky to choose a tenant by chance. Tennant credit check is one of the most common and reliable ways to protect that investment. Credit reports are not about getting into someone’s personal life. Think of it as a financial resume. It shows how your tenant dealt with financial obligations in the past. This means if your future tenant has a strong credit history, they are more financially responsible and are more likely to pay the rent on time.  

On the other hand, if the tenant has a low credit score, this means that they have late or missed payments. This is a red flag which indicates that a tenant may struggle to pay the rent on time. In this case it is better to think twice before proceeding to signing a lease agreement.  

While skipping this step it may seem to you that you have saved your time and money, but the reality is different. You may face long-term and costly consequences. Thus, tenant credit check is a small yet powerful step that helps you avoid these consequences. The repost is not only a three-digit score, but it also shows you a bigger picture. This lets you assess your tenant realistically and preview their financial habits. 

What is Included in Tenant Credit Report 

In most cases tenant credit reports vary from one platform to another. This means that each platform suggests its own credit report including the information that they think is the most relevant. However, there are some sections that are almost always included in the tenant credit reports. 

These are sections that are the most important for the landlords and give clear insight about the tenant. 

Personal information about the tenant 

Usually these are some basic details such as name and surname, date of birth, and current address to confirm the tenant’s identity. 

Credit score or risk rating 

This is a quick indicator of how risky your potential tenant is. Most platforms provide either a traditional credit score (e.g., FICO, VantageScore) or a simplified risk rating (low, medium, high risk).  

Scores above 700 typically indicate good financial habits. This means that the tenant is trustworthy, and there won’t be any challenges during the renting period.  

Scores between 600–699 indicate that there are issues but not necessarily big ones. This may be that the tenant has one or two late payments. This indicator does not mean that you need to immediately break the deal with them. However, this information gives a hint to be more cautious and attentive. 

Scores below 600 often indicate that the tenant has late payments, high debt, or financial instability. Once you get this information, you’d rather think twice before proceeding to the next step. 

Credit report 

This is the most important part of the tenant credit check report.  This section is formed with all the financial information that is available about your potential tenant. Paid bills, late loans and other financial information can affect the score that is shown in this part of the tenant credit check report.  

Top Tenant Credit Check Platforms in Canada 

As we have already spoken about, choosing the right tenant is one of the most important things. Having interviews with your tenants i useful, however it doesn’t give a clear picture of how financially reliable they are. Fortunately, today Canadian landlords and property managers have access to a wide range of platforms that make tenant screening quick and hassle free. 

Below are some of the top tenant credit check platforms in Canada. Each of them offers unique features to help you with your tenants’ credit reports. 

• Royalinvest.ca 

• MiProperty Portal 

• SingleKey 

• Naborly 

• RentCheck 

• TransUnion SmartMove 

• Experian Connect 

• Equifax 

• RentPrep 

• Tenantpay 

• Landlord Credit Bureau 

How Much is Tenant Credit Check 

When choosing a tenant credit check platform there are a few factors that you need to consider. The important factors are ease of us, detailed reporting, clear and simple reports that are easy to read and understand, fast credit check, requesting and getting tenant consent online and good customer service.  

Whereas the cost of credit checks in Canada can vary greatly. This factor depends on the services and tools available on the platform and used by landlords and property managers. Along with the tools that require membership or subscription there are tools that offer pay-as you go options. Like royalinvest.ca charges only for the report and doesn’t require any subscription and hidden fees.  

Typically, the average cost for tenant credit check varies from $20 to $50. However, there might be cases when you may need to pay $75 per credit check (per tenant). 

How to Conduct a Tenant Credit Check 

Though it may seem that pulling a tenant credit report is as easy as choosing a platform and paying for the report and the report is ready. However, there are some steps that you need to take before conducting a tenant credit check report. 

Get Tenant’s Consent  

Before pulling a tenant credit report, you must get your tenant’s consent in written (online or offline) form. Some platforms allow you to request your potential tenant’s consent online. Without getting your potential tenant’s consent you are not allowed to pull a tenant credit report. 

Gather Tenant’s Personal Information 

Once you decide to conduct a tenant credit check you will need some information. This information is used to identify the tenant and show their credit background. You need to ask for: 

• Full name (name and surname) 

• Date of birth 

• Current address 

Choose a Platform  

As we have already discussed there are several platforms through which you can pull tenant credit check and get the report. To provide trustworthy information about the tenants the platforms cooperate with major credit bureaus. E.g. royalinvest.ca pulls credit reports from TransUnion. 

Run the credit check 

Once you have chosen the platform it’s time to pull the report. For this you need to fill out the necessary information. Once your future tenant gives you consent, you can pull their credit report.  

Review Credit Report  

Once you have credit check report you need to carefully review it. The important sections to which you need to pay close attention are credit score and payment history. Carefully review the key sections and elements of the tenant credit check report to understand your potential tenant’s financial habits. 

Note: Every tenant has a unique financial situation, so take time when reviewing the report. An issue that occurs once or twice may have a good and grounded explanation. However, a pattern of events suggests the idea of financial instability. 

Conclusion 

In short, tenant credit check allows you to move beyond guesswork and find the right tenant. Though it may feel like an extra step, it is still a simple and powerful method to secure you and your property.  By reviewing your future tenant’s credit report, you can understand their reliability, spot red flags and make confident decisions. With the right platform, you can make the whole process easier and more efficient.