Equifax Canada Pilots Rental Payment Data for Credit Scores

Equifax Canada is testing how rental payment records could be incorporated into credit scoring models to expand access to credit and mainstream financial services. The agency says it has already run limited tests with small volumes of rent payment data to evaluate its suitability for scoring.

An Equifax analysis indicates that adding alternative data, such as on-time rent payments, could help establish or strengthen credit files for millions of Canadians who currently have thin or no credit histories. “Equifax Canada has been leading the way and has been modelling how rental payments, just like mortgage payments, can help build a credit score,” said Equifax Canada president and CEO Sue Hutchison in a company news release. She noted the potential impact for young Canadians, newcomers and other underserved groups.

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Federal government calls on credit bureaus, banks and fintechs to help renters

In late March, the federal government said it wants rental payment histories to be able to count toward credit scores, pointing to renters as an important group that should receive recognition for consistent on-time payments. “Renters matter, and young Canadians put a lot of their hard-earned money toward rent. We think that should count for a lot more,” Prime Minister Justin Trudeau said when announcing several measures aimed at helping renters.

Ottawa’s recent budget further urged banks, fintech companies and credit bureaus to prioritize tools that let renters opt in to reporting their rent payment history. The rationale is that a documented record of timely rent payments could strengthen creditworthiness, making it easier for renters to qualify for mortgages or obtain lower interest rates when they apply for credit.

Equifax has framed the inclusion of rental payments as a way to make mainstream financial products more accessible. “Renters are a growing part of the Canadian economy and it’s time they are recognized for making their rent payments on time,” Hutchison said, stressing that this data could help people who lack traditional credit histories gain a stronger position when seeking loans or other financial services.

Tenant advocates worry rent reporting is a “double-edged sword”

While the government’s push and Equifax’s testing have been welcomed by some in the financial sector, tenant advocates warn the approach has potential downsides. Elizabeth Mulholland, chief executive of the charity Prosper Canada, pointed out that many households face rising rent costs and may occasionally miss payments for reasons beyond their control.

Mulholland emphasized the importance of maintaining tenant choice and control over sharing rental data. She said automatic or mandatory reporting could unfairly harm low-income or vulnerable renters whose occasional missed payments might then damage their credit profiles. “If you just blanket build it in, that could be problematic for a lot of low-income people and vulnerable people,” she said, underscoring that any rollout should include robust opt-in options, clear consent mechanisms and protections to avoid unintended consequences.

Stakeholders and policymakers will need to balance the benefits of richer credit data against the risks of privacy concerns, reporting accuracy and potential harm to vulnerable renters. Proper safeguards, transparent opt-in choices and clear dispute-resolution processes will be essential if rent reporting becomes a routine input to credit scores.

—With files from Ian Bickis

More about credit scores:

• Credit scores and credit reports: What newcomers to Canada need to know
• How to build credit history in Canada
• What does opening or cancelling a credit card do to my credit score?
• Couples and credit scores: How your partner’s credit can affect yours