Unlike credit card or mortgage payments, rent isn’t generally reported to the credit bureaus — unless your landlord takes legal action against you for late or missed payments. But landlords regularly use credit checks to screen applicants, so why shouldn’t paying your rent on time count toward building your credit score?
Using RentMoola to pay your rent via credit card can help you achieve a positive credit history faster, as long as you pay off your credit card in full and on time every month. To maximize your rewards on rent payments and all other purchases, having the right credit card is key. The key to a getting a good credit card? An excellent credit score.
Knowing your credit score is the first step to applying for a great card. You can get your free credit score in Canada online, from there you’ll have a baseline as to what you should be applying for. It’s important that you only apply for cards for which you will be approved, as getting multiple declines can negatively impact your score.
Having a great credit score is the first step in ensuring you get approved for the best credit cards. For example, one of the best cash-back credit cards is the Scotia Momentum Visa Infinite, rewarding you with 4% cashback on gas and groceries, 2% back on pharmacy and bills and 1% back on everything else. This card also requires an excellent credit score. Similarly, the BMO World Elite is one of the best travel credit cards, rewarding you with 2% back on all purchases and also requires an excellent credit score.
The cards we featured in our last article on earning rewards through rent payments both required good credit scores. If you’ll be paying rent on your credit card (and getting some great MoolaPerks in the process), you’ll likely need a higher limit than what you are initially approved for. With a great credit score, your card issuer is much more likely to grant you the larger credit limit. The moral of the story? Great credit score equals great credit cards and faster rewards.
The benefits of having a great credit score don’t stop with credit cards. Having a great credit score makes you more likely to get approved for rental housing. Landlords are looking for credit-worthy individuals who they can trust to pay their rent on time each month. All else being equal between prospective tenants, landlords will always go with the higher credit score. Furthermore, many utility companies will require $100 or $200 as a deposit on new activations or transfers of service between locations. With a good credit score, you’re much less likely to have to hand over a deposit.
Aside from being a best practice, having a strong credit score comes with many benefits. From qualifying for better credit cards to being more likely to get your dream home or apartment, it’s worth making sure you’re taking care of your credit score.