Renting in Toronto without a job is especially difficult when you have no credit history. This is especially true for newly landed immigrants. It is the norm for many landlords and property managers in the city to conduct credit checks on a potential tenant.
It is one method to know whether they can trust the tenant to pay their rent on time. However, it is still possible to land an apartment with no credit history. Below are a few ways to rent that apartment without credit.
Provide a Third Party
One of the surest ways to secure an apartment without a credit history is to present a third party to your landlord. The third-party must not only have excellent credit, they must also be willing to co-sign the lease on your behalf. Even when you have your credit information, some landlords will only feel inclined to let out to you when you present a co-signer.
A co-signer gives your prospective landlord the assurance you will pay your rent or your co-signer takes the responsibility when you default. On the flip side, you shouldn’t consider this option if you have doubts about paying your rent. Your co-signer is vicariously liable for your actions, and you can damage their credit score in a situation where your landlord sues you or evicts you from the property.
Get a Roomie
Another version of a co-signer, only your roommate shares the apartment with you. A roommate is a good option if they’ve got an excellent credit history. Second, splitting the bills makes it easier for both of you to take care of the expenses of living. But just like the co-signer above, your failure to pay your rent can negatively affect their credit score.
Owner rented Apartments
If you’re browsing through the house rental websites in Canada, chances are you won’t be able to speak directly to the landlord. But your chances of explaining your lack of a credit history increases when you look at homes put up for let by homeowners on Craigslist or Kijiji. Landlords who are renting by themselves are far more accommodating when letting out their units compared to a property association or real estate company.
Proof of Income
Another way to rent without credit checks from your prospective landlord is to show your proof of income. Just like a credit report and credit score, proof of income is another way for the landlord to know you’re able to pay your rent when it’s due. The rule of thumb is to look for a rental that’s one-third your income.
You don’t want to spend all the money you make on your rent. Before you go looking at apartments, put aside your payslips for the past six months. It will give your landlord more than enough information to work with. And if you’d like to increase your chances of renting that apartment, you can include any assets or savings you have.
Pay In Advance
Providing proof of income to your property manager may increase your chance of securing your rental, but you may have to step up your efforts if you’ve got no credit history. One way to do this is to offer to make your rental payments in advance.
You can put down an advance rent for three months or pay more on your security deposit as an act of good faith. Doing this will show your landlord you’re willing to go the extra mile to prove your worth as a responsible tenant. It’s important to know this option has a drawback. Your prospective landlord may see your act of good faith as a sign of desperation and may decide to jack up the rent.
Offer to Move in At Once
An empty property is an expensive property. Experienced landlords and property managers know this so well. It’s costly to maintain a property while it’s vacant. That’s cash going down the drain they won’t get back. Some of the expenses that need to be taken care of include property tax, utility bills, and a mortgage if the property isn’t fully paid. By offering to move in ASAP, you’ll be helping to shoulder some expenses.
Many Landlords renting to new immigrants will listen to you if you can explain why you have no credit history. As a new immigrant to Canada, it’s understandable for you not to have a prior credit history. You have nothing to lose by explaining yourself, and if you can provide proof of income, that might just be enough for you to secure your rental.
A credit score is an indicator you’re financially responsible. While it is one of the best ways to show your money management skills, there are other ways to prove your creditworthiness. A reference letter from your bank or current employer can go a long way to assure your landlord you’ll be able to pay your rent on time.
It’s tricky to rent a house without providing credit history to your prospective landlord. However, it isn’t impossible. Follow the tips above to surmount all the obstacles of renting in Canada.