If we talk on behalf of landlords, securing a reliable and trustworthy tenant. Landlords first consider the financial stability of any potential tenant, as it helps them be a better judge of whether to give their home on rent. The easy metric helps effectively screen and resemble aspiring renters. The business plan that needs to be followed is to do a thorough background check along with keeping a tab on the identity, income verification, income proof, records, back index and credit score to get a tenant that will not be a bad decision altogether. The history of credit system Canada is almost as old as the history of credit itself. When you check your credit score on different websites, you may notice that it differs. Knowing the difference between a credit score and a trust score is therefore important.
What is Canada’s Financial System?
Canada utilises a credit score system similar to USA’s but with a few detectable differences. Canada’s score ranges between 300-900; in the USA, they are calculated to be 300-850. Equifax Canada and TransUnion Canada are immediate credit reporting agencies from where the majority of the information is gathered.
The five factors used to determine the credit system Canada are–
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- New Credit Accounts – a digital form of the new credit account.
- Types of Credit accounts- information on credit portfolio.
- Used credit vs available- the proportion of the credit used on credit cards.
- Details of the longest credit history.
- Repay history- a record of all the repayments done to finish the missed or late payment record.
What is The Credit Score of a Renter?
A renter’s credit system Canada is nothing complicated but a measure of your credit worthiness. In simpler words, it is a score that tells your landlord how well you pay your bills, timing and your history regarding the same. This tells the landlord in brief about your credit score. If there are some unpaid bills on your credit card, it indicates that the tenant is lenient and unreliable in terms of bill payments. Which, in other words, can be a red flag if you are looking for a rental.
In cases where the potential tenant has a low credit score, the landlords tend to ask for a higher security deposit prior to moving to secure a sum in case the tenant defaults. The same applies if you try to get utility services under your name in your new rental. This can lead to higher rental prices.
What Exactly is a Trust Score?
Trust Score is an intelligent rating system designed to determine a tenant’s credibility and trustworthiness. For tenants, it is an important part of their resume that helps distinguish their rental application from other tenants. It is an important tool for landlords to screen tenants efficiently. Trust Score simplifies the selection process by giving landlords a safer and more accurate means of determining the suitability of potential tenants. Effectively exceeding the credit score of a typical landlord, the Trust Score provides a complete picture of a tenant’s rental history.
How Does The Trust Score Stack up Against Other credit scores?
Many landlords are aware of the credit ratings offered by more traditional credit reporting organisations. These firms use a sliding range of 300 to 900 to transmit credit scores – the numerical representation of a tenant’s credit risk. The Trust Score scale spans from 1 to 100.
Also, keep in mind that running a credit report usually comes at a cost. You have the option of hiring a service to perform the credit check.
| Trust score | Rating | Other Credit Rating Score | Remarks |
| 90+ | Excellent | 800+ | Perfect trust score! Renters with this score shall receive the rent with confidence. |
| 71- 89 | Good | 700s | Great Trust Score! Though not as good as the previous score, the rent may or may not worry! |
| 60-70 | Average | 600s | There could be some missing information from the profile and a poor and incomplete credit history. Rents should consider following up! |
| 0-59 | Poor | <600 | There could be unverified documents and a history of missed or late payments, which could prove troublesome later. Consider requesting more information! |
Why Do Landlords Choose To Follow The Trust Score?
According to research on landlords, trust is one of the most important factors in an efficient, harmonious and ideal way to create a perfect tenant-landlord relationship. It is helpful to decipher an accurate judgement on a prospective tenant’s stability and makes it an easy selection. A good trust score can help secure a good home for you and your family and leave a good impression whenever you look for a new place, either for rental or ownership.
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Frequently Asked Question (FAQs)
Equifax, Experian and TransUnion are the three major credit bureaus, and the three types of credit scores are FIGO, Vantage and others.
The hardest credit crore to get is 850, it is also considered the perfect score. Having a good credit score is essential if you aspire to have the best credit cards, mortgages, and loan rates.
A few of the most reliable sources of credit scores are TransUnion and Equifax, their calculations have different sources, and neither is less or more accurate.
The banks mostly look at the credit score of FICO. What are the three types of credit scores?
What is the toughest credit score?
Which credit score is most accurate?
Which credit score do banks use?
