The plan to make the practice more widespread is encouraging, said Andrew Graham, chief executive of Borrowell.
“We’ve been saying for a couple of years now, how important it is for consumers to be able to report rental payments to build up their credit history, so I was pleased to see the government taking some action.”
Prime Minister Justin Trudeau said Wednesday that there’s something fundamentally unfair about paying $2,000 a month for rent, while those paying the same amount toward a mortgage earn equity in their home and build their credit score.
He said the government wants landlords, banks and credit bureaus to make sure rental history is taken into account on credit scores, giving young first-time buyers a better chance at getting a mortgage, with a lower interest rate.
Equifax Canada chief executive Sue Hutchison said the credit agency, which has already been working to include rent payments, was excited to hear about the government’s announcement.
“We look forward to working with the governments, the banks and other lenders to ensure this important evolution in the credit infrastructure in Canada is implemented responsibly,” she said in a statement.
Rent reporting, credit bureaus and open banking
Graham said open banking, which will allow consumers to safely share their banking data to third-party financial players like Borrowell, is crucial to the success of the program.
“What we’ve been telling the government and, and frankly, anyone who will listen, is that what we really need is open banking.”
Zac Killam, CEO of FrontLobby, which has been offering rent reporting to credit bureaus since 2018, said he supports any efforts to raise awareness of the benefits.
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