How Tenant Screening Can Affect Your Credit Score in Ontario

Tenant screening can affect your credit score, but only when the landlord's credit check is a hard inquiry. Canada's Financial Consumer Agency lists some rental applications as hard inquiries, which appear on your credit report and can affect your score. A soft inquiry does not affect it. Before you consent, ask which kind of check it is and which credit agency supplies the report.

Does tenant screening affect your credit score?

It depends on how the report is requested. The Financial Consumer Agency of Canada (FCAC) describes two kinds of credit check. A hard inquiry appears on your credit report, anyone who views the report can see it, and it affects your score. The agency names some rental applications among its examples. A soft inquiry only appears on the copy of your report that you see, and it does not affect your score. Requesting your own report is a soft inquiry.

So a landlord's credit check is not automatically harmless and not automatically harmful. Other parts of screening, such as references, income checks and ID checks, are not credit inquiries at all.

How big is the effect of a hard inquiry? There is no honest number to give. The FCAC says credit bureaus and lenders use different formulas and do not share the details. It does warn that too many inquiries close together can make lenders think you are urgently seeking credit. That advice is written for credit applications, but the same caution makes sense if you are applying for several rentals at once and each one runs a hard check.

Three habits limit the risk:

• Ask the landlord or screening company whether the check is a hard or soft inquiry before you sign the consent.
• Look at your own report first, so you are not surprised by anything in it.
• Apply to the rentals you are serious about, rather than to every listing in one afternoon.

Does tenant screening show on your credit report?

A hard inquiry shows. Ontario's page on credit reports says a consumer report can include inquiries by organizations that accessed your file. A soft inquiry does not show to others, but you will still see it on your own copy.

There is also a paper trail under the Consumer Reporting Act. When you ask a consumer reporting agency for your report, it must disclose the name and telephone number of every person on whose behalf your file was accessed in the previous three years. If it gave out a report about you in the previous year, you also get the names and numbers of the recipients. A landlord's check can therefore be traced even when it did not move your score.

The screening report itself is a different thing from your credit file. A screening company may combine credit information with references, employment and identity checks into one document for the landlord. The credit part comes from a bureau file. Dispute errors there, with the bureau.

What a landlord must do before running a credit check

This is general information, not legal advice. Under the Consumer Reporting Act, a consumer reporting agency may give a consumer report to a person it has reason to believe intends to use it in connection with entering into or renewing a tenancy agreement. Tenancy is a permitted purpose. The Act also says no person shall request or obtain a consumer report containing personal information about a consumer unless that person first gives written notice of the fact to the consumer and, if the consumer asks, tells them the name and address of the agency supplying the report.

Separately, if you ask a person in writing or in person whether a consumer report has been or will be used for a specific matter, they must tell you, and give you the agency's name and address. So you can always ask a landlord, "Did you use a credit report, and from whom?"

In practice, landlords and screening providers ask for the applicant's written consent before a check. Our tenant screening and placement service follows that approach. For the privacy side, see background check consent under PIPEDA, and for how landlords read the results see credit checks on rental applications.

How to check a tenant screening report about you

Work in this order:

1. Ask who supplied it. Ask the landlord, in writing, whether a consumer report was used and which agency supplied it.
2. Request your own file. Ontario's page says you can request your report from any agency online once per month free of charge, and your report and score from Equifax or TransUnion online once per month, or by phone or mail twice per year. Reports and scores differ between agencies, so check both.
3. Ask the screening company what it holds. Policies differ on whether they give applicants a copy of the report they prepared. It costs nothing to ask.
4. Read it line by line.

The FCAC suggests looking for:

• wrong personal details, such as an old address or date of birth
• payments marked late that you made on time
• accounts you do not recognize, which can be a sign of identity theft
• negative items that remain longer than the maximum time allowed

Checking your own report does not affect your score.

How to dispute a tenant screening report

Ontario law gives you the right to dispute information that is incorrect, inaccurate or incomplete. The steps on Ontario's credit reports page are:

1. Ask the agency to investigate the information.
2. Give it documents that support your claim, such as statements and receipts.
3. If the information cannot be verified or is found to be inaccurate, the agency must correct or delete it.
4. On request, the agency sends a notice of correction to recent recipients of your report.

The FCAC adds that credit bureaus correct errors for free, and that you can contact the lender directly to speed things up. If the lender says the information is right, the bureau keeps it on your report. In that case you can add a short explanatory statement to your file. Ontario's page says the statement is free and can be up to 200 words.

If you cannot resolve the problem with the agency, you can complain to the Registrar of Consumer Reporting Agencies, according to the same Ontario page. Tell the landlord what you have done and ask them to review the corrected report. The Landlord and Tenant Board (LTB) deals with tenancy disputes, not credit files.

What landlords can tell applicants, and how to handle a dispute

Applicants worry about credit checks, and a clear message early saves questions later. Here is wording you can adapt:

"We ask for your written consent before we request a credit report. The report comes from [agency or provider name]. You can ask us for the agency's name and address at any time. Depending on how the check is run, it may appear as an inquiry on your credit report. If you think something in the report is wrong, tell us and dispute it with the agency. We will review a corrected report before we decide."

Do not promise that a check will have no effect unless your provider has confirmed it runs a soft inquiry.

When an applicant disputes a result:

• Give them the agency's name and address and tell them to dispute it there. You cannot correct a bureau file.
• Agree a short, reasonable time for a corrected report, and do not discuss one applicant's report with others.
• Do not rely on the disputed item while the dispute is open.
• Apply the same criteria you apply to everyone, and record what you reviewed and why you decided as you did.

Credit information is one input. Landlords may also consider references, rental history and income information together with it. Keep your decision record with the application file, as covered in our guide to reading tenant screening reports.

Credit score and tenant screening questions

Does a landlord credit check lower your credit score?

Only if it is a hard inquiry. The Financial Consumer Agency of Canada says hard inquiries, which include some rental applications, affect your score, while soft inquiries do not. The agency does not give a number of points. Ask the landlord or screening company which type they run before you consent.

Does tenant screening show on a credit report?

A hard inquiry appears on your credit report and can be seen by anyone who views it. A soft inquiry appears only on your own copy. When you request your file, the agency must list who accessed it in the past three years, so you can trace a landlord's check either way.

How do I dispute a tenant screening report?

Ask the credit agency that supplied the information to investigate, and give it documents that support your claim. If the item cannot be verified or is inaccurate, the agency must correct or delete it. If you are not satisfied, add an explanatory statement or complain to the Registrar of Consumer Reporting Agencies.

Can a landlord check my credit without telling me?

Under Ontario's Consumer Reporting Act, a person must first give written notice before requesting or obtaining a consumer report containing personal information about you. You can also ask in writing whether a report was used and which agency supplied it. Reputable screening providers ask for written consent first.

Devon Moore, Operations Lead Co-Founder & Operations Lead — D&D Property Management

Devon Moore is the co-founder and Operations Lead at D&D Property Management, managing rental properties across Kitchener-Waterloo, Cambridge, Guelph and Waterloo Region.