How to screen tenants in Canada

This guide is for landlords and property managers screening renters in Canada. Credit reporting and privacy rules work differently in the US, so the details here won’t all carry over.

Tenant screening is how you check that what’s on an application holds up. In Canada it usually means a credit report, often a background check and a call or two to references.

Used well, it protects the owner and lets you approve good renters with confidence. Used carelessly, it turns away people who would have paid on time for years.

Skipped altogether, it leaves you guessing about who you’re handing the keys to. If that guess is wrong, the cost can be months of missed rent, damage to the home, neighbours in the building who have to live with the fallout and an eviction that can take months to get through, and it’s the owner who pays for most of it.

So screening is worth doing. The harder part is doing it well, and that’s easiest to see with two applications side by side. Imagine both of these arrive for the same one bedroom.

Daniel has a credit score in the high 700s, a good job and a tidy application. Amara moved to Canada from London last year. She has a steady job as a nurse, a glowing reference from her landlord in the UK and almost no Canadian credit history.

On scores alone, Daniel wins easily. Here’s how screening them properly might change that.

Ask first

Before you order any report on either of them, get their written consent and tell them what you’ll check. Most renters expect it and are glad to agree when it’s explained plainly.

Collect only what the report needs. A credit check works with a name, date of birth and address history, so there’s no reason to ask for a Social Insurance Number.

Order the reports

With consent in hand, order a credit report for each applicant, and a background check if you use one. Leasing software such as Nodus by Tuze can help you easily order the report and get back something that’s easy to read.

How well a report matches the applicant depends on the details you order with. A credit bureau finds the right file by matching a name, date of birth and address history, so check those against the applicant’s ID before you order. Use their full legal name, ask about any former names, and make sure the addresses go back a few years. A typo or a missing address can bring back a thin file, no file at all, or even someone else’s.

Reading a credit report

A tenant credit report usually shows:

• A credit score
• Open accounts and their balances, such as credit cards, car loans and lines of credit
• Payment history, including how late and how often
• Collections, judgments and other negative items, if there are any

For a landlord, payment history is the useful part. Someone who pays their phone bill and credit card on time, month after month, will very likely pay rent the same way. The score is only a summary of that history, and it can be dragged up or down by things that have little to do with rent.

That’s where Daniel’s report gets interesting. His score is high because he’s had credit for a long time, but his payment history shows two accounts sent to collections this spring. A collection from four years ago with clean payments since would be a different story. Two new ones are worth a conversation before you decide.

Amara’s report is thin, with a few months of history and nothing negative in it. That tells you very little, which isn’t the same as telling you something bad.

What a background check adds

A background check looks for public records tied to each applicant’s name and details that matter to a tenancy, such as past eviction orders where they’re available. What’s included depends on the report you order. Treat it like the credit report, as one piece of the picture rather than the whole of it.

A background check doesn’t prove the person applying is who they say they are. That’s what an ID verification does, by checking their photo ID against them.

Call the references and check income

Reports only cover part of the story. The rest comes from people who have rented to the applicant before and from proof that the income on the application is real.

When you call a previous landlord, ask questions with plain answers. Did they pay rent on time? Did they give proper notice before leaving? Was the home left in good shape? Would you rent to them again? Use the phone number you can find for the landlord or their company yourself, rather than only the one on the application. A friend posing as a past landlord is one of the easiest ways to get past a careless screening.

For income, a recent pay stub or a letter from the employer is usually enough. If something doesn’t add up, call the employer on a number you’ve looked up, and ask only whether the person works there and in what role.

This is where Amara’s application gets stronger. Her landlord in the UK confirms she paid on time for three years and left the flat spotless, and her hospital confirms her job. Daniel’s previous landlord is harder to reach, which is worth noting, though not by itself a reason to say no.

Reading reports fairly

Reading the reports is where Amara could most easily be turned away for the wrong reasons. Fairness protects you as well as the applicant. If a decision is ever challenged, at a human rights tribunal or anywhere else, a consistent process you can show is your best answer. A few habits keep it fair.

Use the same standard for everyone

Decide what you’re looking for before you see the first report, and hold every applicant to it. If two recent collections would worry you for one applicant, they should worry you for everyone.

Don’t read a thin file as a bad one

A newcomer to Canada, an international student or a first time renter may have little or no Canadian credit. That isn’t evidence they won’t pay. Ask for something else, such as a reference from a previous landlord abroad, proof of savings or a guarantor, and offer those options to everyone in the same position. Amara already has the reference.

Look at the whole application

A credit report sits alongside rental history, references and income. In Ontario, the regulations say income should be weighed with that other information rather than used on its own. Put together, Amara’s steady income and her UK landlord’s reference say more about how she’ll pay rent than her short Canadian file does.

Tell people why

If a report leads you to turn someone down, say so and tell them which agency the report came from. They have the right to see their own file and to correct mistakes in it. If Daniel’s collections turn out to be an error, he deserves the chance to fix it.

Keep it private

Whoever you choose, both applicants have now trusted you with some of the most sensitive information a landlord or property manager holds. Only the people making the decision should see their reports. Don’t forward them around or print them for a file. Decide how long you keep them, and delete them when that time is up.

Back to Daniel and Amara

Run through properly, the two applications look different from how they did on scores alone. Daniel may still be a great tenant, but his recent collections are worth a conversation before you say yes. Amara’s thin file turned out to say very little, and her income and her UK landlord’s reference say a lot. Whoever you choose, you’ll be able to explain why, and you’ll have held both of them to the same standard.