Why Credit Checks Should Have No Place In Rental Housing – Hear Me Out
Anyone who has gone through a rough patch financially knows exactly how damaging a blemish on their credit report can be. Depending on just how significant that bump in the road is will make all the difference in your eligibility for accessing credit in the future and whether or not your interest rate on that credit will be minimal or through the roof. Having worked in finance for 7 years I have seen clients with interest rates upwards of 37% on borrowed funds due to their less than perfect credit history. And unfortunately, it’s far easier than one would think to end up with a black mark on your credit file that will haunt you for years to come.
But there is a particularly troublesome area of damaged credit’s influence on your access to opportunities, and that is access to housing or lack thereof. With vacancy rates in urban centers dipping as low as 1%, landlords can be increasingly picky about whom they rent to, making access to housing for those who don’t have a flawless credit report, and exemplary references even further out of reach. Couple that with the drastic increase in housing prices and you have a disaster of significant proportions.
The city of Ottawa declared a housing emergency, and similar cries are echoed across the country. Rent control is minimal and leaves landlords the ability to hike the price of vacant property as high as they would like to in a market that is rocked by low vacancies. Your credit report can be the final nail in your coffin while searching for a home. That credit card debt that led to missed payments or a file In collection could be the factor that stands between homelessness, and access to housing as long as landlords can ask for a credit check during the application process.
Now, I know what you’re thinking: shouldn’t a property owner be entitled to screen their prospective tenants? Well, yes. They should be able to screen their applicants to find the right person to trust with their property, but their credit report should not be on the table. Why? Because in this unstable economy the burden of debt repayments, and the rising cost of living makes it very easy for the average middle-class consumer to default on those payments and cause their credit score to sink. And let’s face it; defaulting on a card payment or a phone bill does not mean they will risk defaulting on the most imperative payment to make to keep the roof over their head.
The burden of credit in terms of housing makes the market extremely inequitable. It leaves access to housing open to the upper-middle class while leaving the average family, and low-income populations behind. At some point, we need to bridge the gap between a landlord’s desire to see a consistent return on their investment, and the fundamental human right to housing in Canada. Where does the capitalist fixation with profit end, and social responsibility begin?
Canada has recognized adequate housing as a fundamental human right, and the National Housing Strategy Act received Royal Assent on June 21, 2019. We are beginning to reframe the way we view access to housing and create an equitable structure for the market. In doing so, we need to ask ourselves the tough questions and confront the issue of greed that’s fuelling the crisis. Will you be part of the problem or a catalyst in the solution?