Don’t let a lack of credit history or job letter hold you back from renting a home in Canada. This guide will show you alternative ways to prove your reliability as a tenant and successfully secure a rental.
Moving to a new country is an exhilarating journey and Canada is a welcoming haven for those seeking a fresh start. And yet, for many expatriates, the process of setting up a new life in the Great White North can be daunting at first. For starters, lack of a credit history is among the first few challenges that newcomers have to deal with. It determines your odds of securing a bunch of things including lines of credit or even an apartment. With no job offer, employment letter and little proof of your credit report in a new country, how can you go about finding yourself an accommodation? Following are some of the tips and strategies to help you get there:
Reveal your cards
First, be transparent. If you are a recent immigrant or Visa holder, let your prospective landlord or property manager know that you haven’t had an opportunity to build credit in Canada yet. Remember you are not the first one and won’t be the last one seeking a rented apartment without a job, a proof of income or almost no credit score. These things take time.
The landlord will no doubt want to run a credit check, which illustrates the applicant’s financial health. If you already have a steady stream of income, however little, through your prior investments, furnish relevant documentation to buttress your case.
First, be transparent. If you are a recent immigrant or Visa holder, let your prospective landlord or property manager know that you haven’t had an opportunity to build credit in Canada yet. Remember you are not the first one and won’t be the last one seeking a rented apartment without a job, a proof of income or almost no credit score. These things take time.
The landlord will no doubt want to run a credit check, which illustrates the applicant’s financial health. If you already have a steady stream of income, however little, through your prior investments, furnish relevant documentation to buttress your case.
Show your reserve funds and savings
A letter from the bank stating that you have adequate funds to cover a few months of rent, will go a long way. Present your bank statements. Not having any outstanding loans or balances helps demonstrate your financial stability and ability to make timely payments. Such paperwork can serve as proof that you have responsibly managed your finances. Highlight the fact that you have no credit because you have no debt. And if it’s all too overwhelming, consult your banking advisor to understand the options available to you.
Get a co-signer
A guarantor or co-signer is someone who agrees to pay rent on your behalf if you are unable to do so. This provides an additional layer of security for the landlord or property manager. Trusted parties including close friends or relatives with good credit can make the cut. These individuals can vouch for your ability to make timely payments and can help strengthen your application.
Look for apartment-share arrangements
Following are a few ways in which you can potentially improve your chances of renting an apartment without a credit rating or history:
Look for apartment-shares: If you can make a good impression, house-shares or apartment-shares with landlords who live on the premises can be a great option. These property owners may be more willing to consider renting to folks without extensive credit status.
Get a roommate: Co-sign the lease agreement with a roommate who has a good credit score. You can increase your chances of being approved for the rental without a credit check.
Sub-lease: Another way is to sublease from an existing tenant. Many tenants occasionally seek someone to split the monthly rent.
When seeking such arrangements, platforms such as Kijiji and Facebook groups can serve as valuable resources. Nonetheless, exercise caution to prevent potential scams. Physically inspect the location, meet the landlord or current tenant and complete all necessary paperwork before committing to any upfront payments.
Pay the First Few Month’s Rent Upfront
Another way to rent without credit checks is to pay the initial months’ rent in advance. Such upfront payment demonstrates commitment and financial stability. This boosts the chances of approval, especially when traditional documentation such as an employment letter is lacking. Property owners appreciate the immediate positive cash flow, building trust and establishing you as a reliable tenant. They may be an effective way to get an apartment without a credit check.
If you can, offer more than expected deposit
Offering a larger security deposit or prepaid rent can be a compelling incentive for landlords to seriously consider your application. This extra financial security provides them with reassurance that you will be able to meet your monthly payments. It also shows your responsibility as a tenant.
But before proceeding with this approach, familiarize yourself with the rent deposit guidelines specific to the province you plan to move to. Some provinces in Canada have rules and regulations outlining the maximum amount of rent deposit that can be requested. By understanding these guidelines, you can ensure that your offer is within legal limits.
If you can, offer to move in right away
Offering relatively larger security deposits may be easier said than done. In such cases, one strategy is to offer to move in immediately. Property managers want to avoid lengthy vacancies, so if you can show that you are ready to move in as soon as possible, it will work in your favor.
Discuss the length of the lease
It’s worth discussing the lease term with the prospective landlord or property manager. Instead of committing to a long-term lease, you may negotiate for a month-to-month arrangement. A shorter lease allows the landlord to assess your reliability as a tenant in the near term.
Furthermore, if you prove your responsibility during the lease term by consistently paying rent on time and taking care of the property, you can potentially extend or change the lease terms to a longer duration. This adds to your credibility, making you a more attractive rental applicant in the future.
Explore condos or basement apartments rented out by individual owners
Consider condos or basement apartments managed by individual landlords. These are not owned by large property management firms which leads to more flexible credit and employment verification processes. These landlords may prioritize reliability and trustworthiness over rigid credit or job stability requirements, personal references or alternative income sources.
Consider neighbourhoods that are away from prime locations
The old chestnut that “the top three keys in real estate are location, location, location” holds true in Canada as much as anywhere else in the world. While prime areas offer proximity to amenities, they often demand stricter application criteria. Areas, say, in the suburbs, may be more likely to have relatively fewer stringent credit or job letter requirements.
These neighbourhoods may have a more flexible application process, accommodating tenants with limited financial histories. An important element in the selection process is to check the accessibility of public transportation in these areas. Ensuring that these areas have reliable and convenient transportation options can help make up for being further away from prime locations.
Look for Newly Built Construction Properties
Exploring newly built construction properties proves beneficial. Such properties often feature more lenient requirements, with less strict credit and employment verification compared to older units.
Utilizing online platforms like Craigslist, Kijiji, and Padmapper or offline ones including local newspapers can unveil a diverse range of listings, including newly constructed units that may be open to tenants lacking traditional documentation. Renting newly built constructions offers well-maintained dwellings with modern amenities and energy efficiency. More crucially, property owners may be flexible in negotiations, facilitating housing for those without a credit history or job letter.
Book temporary accommodation for the first couple of months
Consider staying with friends or family, saving on rent, or opting for long-term stays at Airbnb, hotels, or hostels. It helps to pay using a secured credit card. A secured credit card demands an upfront cash deposit as collateral. This is usually placed in a savings account or Certificate of Deposit (CD). Utilizing temporary accommodation allows newcomers or those with limited creditworthiness to establish a positive payment history, showcasing the ability to meet your rental obligations.
This approach increases the chances of securing a rental property in the future. It’s crucial to retain documentation and receipts from temporary stays as proof of responsible and reliable living arrangements to present to potential landlords.
We have a complete guide on how to rent temporary accommodation in Canada as a newcomer.
Provide positive references
While looking for rented accommodation, your network can indeed supplant your net worth. Positive references play a vital role in persuading potential landlords of your capacity to make timely rent payments. Include a letter from past employers, emphasizing your history of steady employment and responsible conduct. Reach out to current co-workers to vouch for your reliability and work ethic. Family friends, having known you for an extended period, can offer character and credit references, highlighting your trustworthy nature.
Request letters from previous roommates to demonstrate your responsible approach to shared living expenses. It’s crucial to seek references from individuals who can confidently attest to your financial dependability and integrity, reinforcing your ability to consistently meet financial commitments and making your rental application more appealing to landlords.
Take up a survival job and/or volunteer
In Canada, volunteering is common and respected. It means freely giving your time to help others or support a cause. Basic jobs, known as survival jobs, don’t need much education or experience. Examples include being a driver for a ride-sharing service, working in a warehouse or factory, being a cashier, barista, or delivery person, doing sales, telemarketing, cleaning, or serving in a restaurant.
Both survival jobs and volunteering are good for gaining Canadian experience, improving language skills, building a local network, and getting references for a rental application. Survival jobs also give you an employment letter and cover basic living costs while you keep searching for your ideal job.
