Prime Minister Justin Trudeau believes that people’s rent payments should count toward people’s credit scores, but his proposal has drawn mixed reactions.
The new Canadian Renters’ Bill of Rights, announced in March, would help young Canadians enter the housing market by improving their credit scores.
The proposal would make a unit’s rental price history visible so renters can bargain appropriately. The government would also create a legal aid fund to help renters fight bad-faith evictions. The proposal would also mean that credit bureaus must consider a renter’s payment history when calculating their credit score, thereby allowing them to qualify for a mortgage.
“If you’ve been paying that on time for years, that should count towards your credit score. Soon it’s going to,” said Trudeau in a video posted on April 20. “We’re going to change the rules of the game so you can report your rent payments towards your credit score so you can get a better mortgage so you can get a place of your own sooner.”
We’re going to change the rules of the game so you can buy a place of your own, sooner. pic.twitter.com/NJXb767lyv
— Justin Trudeau (@JustinTrudeau) April 20, 2024
Some people online are on board with these proposed changes.
I agree with Trudeau on this. Renters should have both rights and credit score reporting for making rent payments, just like mortgage holders. After all, they are paying the mortgages of those landlords who leverage real estate and use renters to do it.
— Lance Sorensen (@lanceairensen) April 20, 2024
It will also builds that history and trust banks look for concerning mortgages and may honestly open more doors for so many😭
— Just A Lover Girl fr🫂 (@Heyyitsshadow) April 3, 2024
It sounds like there’s a plan in motion to address housing affordability or access to homeownership. Making changes to the rules can potentially open up new opportunities for individuals and families to achieve their goal of owning a home.
— Station 24 (@VidsStation24) April 20, 2024
But netizens pointed out that it’s not just credit scores that are a barrier but saving up for a down payment while paying for “unaffordable rent.”
Building credit through rent is a good move but … it doesnt address the biggest barriers – including unaffordable rent! If you’re young and you’ve been paying rent you’re likely not to have been able to save enough money for a downpayment of $145,000 (required to avoid mortgage…
— Leilani Farha 🍉 (@leilanifarha) April 20, 2024
Are there renters that don’t know what a credit rating is?
People that are renting will likely never be able to save up a down-payment on a home.
People can have a good credit rating without using their rent payments.
This is not going to have a major impact on anyone.— FLEXjs (@FLEXjss) April 20, 2024
I think the biggest hurdle for people to not be able to afford a house is the down payment so could you do something about that and either offer a lump sum for being a good renter or offer them rent to own opportunities for being a good renter, think about it this way so you can…
— 🇵🇰Hannah🇵🇸💫 (@iHannahVoice) April 21, 2024
If you are reading this and nodding think this makes any sense, let me tell you with 850 credit score (out of 900) the mortgage is equally unaffordable. The credit score does not change the rates. Maybe banks will let you get into a mortgage, and then you will be in debt for life
— Marc (@ouch_canada) April 21, 2024
I can’t buy a home because who knows what’ll happen with interest rates
Imagine thinking you’re going to have a 1k mortgage and then suddenly years later it’s 3k
Fuck that— John. (@dajohnman) April 20, 2024
It may actually hurt renters if they are late payers … one can now check and see..
— fourthlineplumber (@fourthlineplum1) April 21, 2024
What are your thoughts on this? Let us know in the comments.
With files from Megan Devlin