The federal government’s commitment to have rent payments counted toward credit scores is being welcomed by companies that already offer the service, while renter advocates have raised concerns.
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. “What we’ve been telling the government and, and frankly, anyone who will listen, is that what we really need is open banking.”
FrontLobby relies on both the renter and landlord verifying payments, so isn’t reliant on an open banking model. A study it conducted with Equifax found that rent payments were the only source of credit score for almost half of users of the service. “You don’t want to set those people further behind. And those challenges go right up the income scale well into the middle class.”
“Their bargaining powers is so much stronger than tenants already, and so when you add the these private reporting mechanisms that are run by the landlord … it’s not only problematic, it’s dangerous,” said Kwan.