Reporting your past rental payments can help build your credit history by reporting up to your last 24 months of rent payments to Equifax Canada.
There are many factors that determine your credit score:
- Payment History: Your payment history is your track record of how successful you’ve been at making credit payments, and is the single biggest factor that makes up your credit score. By making your rent payments on time and having them reported to Equifax Canada, you’re building a solid payment history, signaling to lenders that you can be trusted with credit. Making on-time payments makes up ~35% of your overall credit score.
- Credit Mix: Your credit mix refers to the various types of credit accounts that make up your credit report. By adding an open tradeline for rent reporting, you’re diversifying the different types of credit on your report, which indicates that you are able to successfully manage multiple credit accounts. The types of credit or tradelines you have on your credit report determines ~10% of your overall credit score.
- Credit History: If you’ve never had a credit product before and this will be the first tradeline on your credit report, then you’ll also be building your credit history. The longer your history with credit, the more trustworthy you’ll be seen by potential lenders when assessing whether or not to lend to you. Credit history makes up ~15% of your credit score.