So, you have bad credit. It's not the end of the world. Though some landlords would snub your rental application right away if you have bad credit, completely overlooking your salary and rental history. Some only check your credit to uncover any rental-related blemishes on your credit report or check for previous evictions. Nevertheless, a bad credit history doesn’t obliterate your chances of securing a rental in Toronto. There are still tons of things you can do if you want to rent a condo in Toronto. Here are a few to begin with.
Find a Co-Signer or a Guarantor
This solution is one of the easiest, but only if you know someone close with a credible credit score who can act as a guarantor or is willing to co-sign your rental agreement. Most of the times, this person turns out to be the applicant’s parents, siblings, or another family member. On co-signing the agreement with you, the co-signer fully shares the obligations of the rental agreement, while a guarantor provides a legal guarantee of your compliance with the set obligations, via a legal document referencing the tenancy agreement. Toronto Condos Landlords are more attracted to co-signers, since they take on the responsibility of making good on the applicant’s missed rental payments. This type of “insurance” appears more tangible as compared to a written guarantee.
What you need to understand here is that the guarantor or the co-signer should fully be aware of what the agreement entails and what they are getting into. For instance, if at any point during the period of the rental agreement, the tenant fails to meet a financial obligation, the co-signer will be held accountable for paying up to the landlord. This is a bigger financial responsibility than people realize. What most people don’t know is that if your co-signer also fails to meet the payment, the landlord will be in a position to sue you both. So, be a responsible tenant and do not get into a long-term lease agreement if you are not sure that you can make timely rental payments. Avoiding putting yourself and your guardian angel into financial and legal hot waters.
Find a Roommate with Good Credit
This is where you allow a third party to become the sole signatory and assume full risk on the rental agreement. Regardless of any written or verbal agreement you have struck with the signatory, this option makes them responsible for paying full rent to the landlord. This is kind of like a sublet where your roommate commits to covering the full rent each month in front of the landlord, and then subleases a portion of the apartment to you separately. This is nothing like a traditional sublet, since technically the main tenant is remaining on the site and sharing premises with you.
This option works best when your roommate is someone you trust completely. It can turn out badly if you move in with someone you barely know, especially with no formal sublet agreement in writing, detailing your rights. If you do go down this road, make sure your landlord knows that despite having only one name on the lease, there will be multiple people sharing the space. While each building has its own rules about how many people are allowed under one roof, a landlord cannot prevent tenants from subletting under the Ontario Tenants’ Rights, provided that certain conditions are met.
Be Honest and Provide Positive References
When it comes to nurturing a good relationship with your landlord, honesty counts. Landlords just want a tenant who is respectful of the neighbours and their property and pays his rent on time. If you are a people’s person, this matters a great deal. Since such ideal tenants are hard to come by, landlords try to hold on to them when they find them. Having a bad credit doesn’t make you a bad tenant. Sure, renting to a tenant with a poor credit history puts the landlord at a risk, and they would be more apt to choose a contender with good credit if it comes down to the two, but honest and being upfront pays a great deal.
It all comes down to how you present yourself. It is better to be honest about credit situation and how you plan to resolve. Not to mention, positives references from credit card companies, employers, and previous landlords, can make your landlord more forgiving about your credit report. Anything that makes you come off as an honest and hardworking person.
Wait Till you Get Your Credit Score Back Up
If things are not working in your favour, its best to wait out your current circumstances until your credit score gets back on track and you can re-apply as a more favorable candidate. It is not too difficult to improve your credit score; all you have to do is to pay your bills on time and pay down your debt. To know more about improving your credit rating, check out this fact sheet from the Government of Canada
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