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Pay your rent and build your credit score

Updated: Nov 29, 2022

Helping students find housing is a start, but Elev is partnering with Billi to help students build their credit score while paying rent!

a figure pushing the meter forward on a credit score rating

How much can rent impact your score?

You already pay tuition, and if you live off campus, you're paying rent. But now you can make your rent work towards building your credit history, similar to how mortgage payments help Canadian home-owners.

According to the Landlord Credit Bureau (LCB), a maximum of 35% of your income will go towards rent. So if you're paying your rent on time, 12 times a year, this is a significant expense that can be used to build your credit score.

How can you build credit by paying rent?

The idea of paying rent to build credit isn't new, but it's new to Canadians since 2020. To build your credit score with rent payments, renters can use platforms like Billi. This platform reports your rent payments to Equifax, one of the 2 biggest credit bureaus in Canada. For a fee of $4.99 per month, Billi will use your rent payments to help you build your credit score.

Your landlord (i.e. the creditor) can also report your rent payment history. They would do this by reporting to the Landlord Credit Bureau (LCB), who then send the data to Equifax. This data is then filed on the tenant's consumer credit report. This report stores your credit activity, and current credit situation (loans, credit accounts).

You can't build your credit score through rent payments alone however. But the more bureaus your rent is reported to, the more impact it has on building your credit score. However, Equifax is the only credit bureau working with the LCB in Canada.

Improving the student renting experience

One con that student renters find, and landlords identify when renting to students, is that students don't have any rental and credit history or landlord references. Which is why rent reporting presents the solution of starting a student's credit history.

Elev provides an all-in-one app that allows students to find their home off campus, pay rent and communicate with their landlord. Being able to report rent is beneficial to students and international students, because you are just starting to build credit and can now use rent payments to your advantage.

However, just as paying rent on time can improve your credit, late rent payments can do the opposite and negatively affect your credit.

Benefits of building your credit:

Did you know it takes 3-6 months to build enough credit history to get a base-level credit score?

And on average, a credit score around 660 or higher can convince landlords to rent to you in Canada. This means that rent payments paired with other credit building actions such as paying bills on time, having a student credit card, that are paid before its due date, can help you build a base credit score. Getting the opportunity to build good credit early means being able to qualify for future loans, credit cards and even cell phone plans at better interest rates.

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