The plan to expand the practice is encouraging, said Andrew Graham, Borrowell’s chief executive.
“We have been saying for several years how important it is for consumers to be able to report rent payments to improve their credit. That’s why I was happy that the government took action.”
Prime Minister Justin Trudeau said Wednesday that it’s fundamentally unfair to pay $2,000 a month on rent while those that pay the identical amount on a mortgage buy shares of their home and improve their credit scores.
He said the federal government wants landlords, banks and credit reference agencies to make sure rental history is taken under consideration when assessing creditworthiness to present young first-time buyers a greater probability of getting a mortgage at a lower rate of interest.
Sue Hutchison, chief executive of Equifax Canada, said the credit agency, which has already been working to incorporate rental payments, is worked up in regards to the government’s announcement.
“We look forward to working with governments, banks and other lenders to ensure this important development of credit infrastructure in Canada is implemented responsibly,” she said in a press release.
Rent reports, credit reference agencies and open banking
Graham said open banking, which can allow consumers to securely share their banking information with third-party financial players comparable to Borrowell, is critical to this system’s success.
“What we’ve been telling the government and, frankly, anyone who will listen, is that we really need open banking.”
Zac Killam, CEO of FrontLobby, which has been providing rental reports to credit bureaus since 2018, said he supports all efforts to boost awareness of the advantages.
