This week, Borrowell, a Canadian company, launched a program allowing renters to report up to 24 months of past rent payments to Equifax Canada with no landlord involvement required. By providing renters the ability to report past rental payment history, Borrowell said Canadians can finally benefit from their track record of responsible financial behaviour, and work towards building stronger credit and further financial stability.
Borrowell has launched this new program to address the needs of the majority of renters who have been making consistent, long-term rental payments, with nothing to show for it when it comes to their credit profile. A new survey conducted with more than 1,500 Borrowell members who are renters revealed that 65% say they would be in a better financial position today if they had started building credit earlier, and 87% agreed that renters should be able to use rent payments to build credit history.
The majority of renters have been renting for more than 11 years, paying between $1,000 and $2,000 a month. This means those renters would have spent between $132,000 to $264,000 on rent payments with no impact on their credit. This amount sums up to more than an 18% down payment on an average $704,000 Canadian home.
Close to 60% of respondents with credit scores below 660 feel less confident they’ll ever own a home in Canada. Of Canadian immigrants who are renters, 63% seek to build credit history so they can apply for a mortgage. The rate is 50% for non-immigrants.
This lack of credit history has practical implications; 59% of renters say their credit card options are, or previously were, limited due to their credit score, while 67% of Gen Xers feel much more limited in credit card options due to their credit, compared to Gen Z at 44%.
In 2022, Borrowell launched its Rent Advantage program, the first service in Canada to help renters build a credit history by reporting timely rent payments without landlord involvement to Equifax Canada. Now, Borrowell is offering additional rent reporting options to Canadians to allow renters to use up to 24 months of past rent payments with a money-back guarantee if users don’t see an improvement on their Equifax Canada credit score after payments are added to their report.
“We are thrilled to be offering Canadian renters even more options to build their credit and forge a path to financial success,” said Andrew Graham, CEO and co-founder of Borrowell. “At Borrowell, we have seen more and more responsible, long-term renters come forward looking for options to build credit.”
“We developed this program to make the credit system fairer for renters and to have their track record of responsible financial behaviour be recognized on their credit profile. This service builds off our Rent Advantage program to allow even more Canadians to achieve their goals faster, like purchasing their first home.”
For a one-time fee of $59, Canadian renters can start building credit right away by submitting past rent payments to Equifax Canada with no landlord involvement required. The renter will receive a link to submit their lease details, as well as bank statements or rental receipts to prove timely rent payments. These details will be reviewed by Borrowell before the information is submitted to Equifax Canada to add to the member’s credit report.
With the money-back guarantee, members who do not see a credit score increase after the past rent payment history has been added, are eligible for a full refund. This program complements Borrowell’s existing suite of credit education and credit-building tools, including Rent Advantage, Credit Builder, an installment loan product, and free credit monitoring which is used by more than three million Canadians.