Let's consider the options available to you if you've been denied for a rental application.
Nov 08, 2022
Dec 02, 2022 • 14 min read
Want to build your credit history with your rent payments? Check out Borrowell Rent Advantage™!
Applying for an apartment is a lot like applying for a job. There are many factors to be considered and it’s not usually one single factor that will disqualify you.
The most common reasons for denied rental applications are insufficient or unverified income, bad references, poor rental history, and poor credit history. Your application will be outright denied if a landlord finds out you’re lying about your income, employment, rental history, or references.
You cannot be disqualified for having no credit or no rental history. You also cannot be disqualified for or discriminated against because of age, race, marital status, sexual orientation, or gender expression.
Don’t be discouraged if you have poor credit or low income, there are other ways to prove financial stability and trustworthiness. We’ll cover some of those here.
Every province, territory, and city has its own rental regulations. Be sure to know your rights in your specific area. In this article we’ll cover the main things that can disqualify you from renting an apartment so that you know what to look out for and how to create a strong rental application.
In some provinces and territories, landlords are allowed to ask for a credit check in order to help assess how financially responsible you are.
Poor credit can indicate a history of not paying your bills on time or being overextended financially. No credit often means you’re a student, a new immigrant, or you simply haven’t opened any of your own sources of credit yet (a credit card, loan, or phone bill in your name).
A landlord cannot disqualify you because you have no credit history. A landlord can disqualify you if you have poor credit as well as low income, bad references, or no cosigner or lease guarantor. A bad credit score on its own cannot disqualify you. Landlords must consider other factors in assessing your financial stability.
While there is no standard minimum credit score required to be approved for an apartment, if a landlord is asking for a credit check, they’d likely prefer to see that you have good credit.
In Canada, a score of 660-712 is considered above average or fair, a score from 713-740 is considered good, and a score above 741 is considered excellent.
In general, if your credit score is above 713, that will be a positive sign to a landlord and you likely won’t have to worry. If your score is average or below average, be prepared to supplement that with additional proof that you will be able to make payments on time and in full. That includes good references, rent receipts from previous landlords, or offering to provide a co-signer.
Yes, you can get an apartment with a credit score of 500.
In Canada, a credit score of 575-659 is considered below average and a score between 300-574 is considered poor. While a poor credit score won’t look good to potential landlords, it doesn’t have to stop you from getting an apartment.
Be prepared to show additional information that proves you will be a trustworthy tenant who can pay their rent on time. Strong references, rent receipts from previous landlords, pay stubs, proof of savings, or providing a co-signer are all ways to make up for a poor credit score.
If you’re not in a rush to secure a new apartment, work to improve your score before applying. You can boost your score by paying your bills on time, paying down your balances, keeping your credit utilization rate low, and disputing any errors on your credit report. Don’t apply for any new sources of credit as that will cause a temporary dip in your score.
You can get your credit report online, by mail, or in person. Getting your credit report online will be the fastest and most convenient.
You can download your Equifax credit report for free from Borrowell. It’s updated weekly and comes in a PDF format that you can easily share with landlords.
Yes, a landlord cannot use a lack of credit history or rental history against you. Most students and new immigrants will be renting without a credit history.
The most common way to secure an apartment with no credit history is to show proof of income, provide a guarantor, or show proof of access to savings.
Be wary of landlords who advertise no credit checks required. Some landlords or leasing companies will try to take advantage of new immigrants or those in precarious financial situations in order to charge higher rent or offer substandard living conditions. You should not have to sacrifice living conditions or your rights as a renter to find suitable housing.
Low or inadequate income is one of the main things that can disqualify you from renting an apartment. If you cannot prove that you are able to make rent, a landlord is going to see you as high risk and will probably not want to rent to you.
A landlord is within their rights to disqualify you if you cannot prove that you are able to meet the rent payments. However, in most cases a landlord cannot disqualify you based on your income alone. A landlord can only ask for income information if they also ask for and consider your rental history, credit history, and references.
As a rule of thumb, most landlords won’t want to rent to you if the rent payments are more than 30% of your gross monthly income. This is called a rent-to-income ratio. To qualify for a $1500 a month apartment, you’d have to make $4500 a month before tax and deductions.
A landlord’s ability to have or enforce rent-to-income ratios will depend on local regulations. Canada’s housing market is notoriously expensive. Many people pay upwards of 30% or even 50% of their income on rent. Just because you spend 50% of your income on rent doesn’t mean you’re a risky tenant. Strong references from previous landlords and a positive rental payment history can help ensure you’re approved for an apartment even with a high rent-to-income ratio.
You can show proof of income through pay stubs, letters of employment, bank statements, tax returns, or a proof of income statement from the CRA. Bank statements, tax returns, and proof of income statements are more common for those who are self-employed. Records of spousal support, child support, social assistance and pension income are other forms of proof of income.
A landlord cannot ask to see how much money is in your bank account. However, you may offer to provide bank statements as proof of access to income if you’re self-employed or a new immigrant.
If you are asked to provide a co-signer, your co-signer will have to provide proof of income as well. They will have to show enough income to be able to qualify for the apartment on their own.
Lying about your income will disqualify you. Do not guess or make assumptions about your income. Any information you provide has to be verifiable. For example, a landlord must be able to contact your work to confirm income. Pension or social assistance payments can usually be verified through the CRA.
Always list your gross income, which is your income before tax. You can needlessly disqualify yourself by only giving your after-tax income.
A landlord will almost always ask for references. References showcase your ability to maintain relationships over time. A good reference is able to speak to your character and confirm that you have the qualities of a desirable tenant; responsible, respectful, and reliable.
Not being able to provide references when asked can disqualify you. References that speak poorly of you or reveal inconsistencies in your application can also disqualify you. For example, if you say a reference is a current manager and the landlord calls them only to discover you were let go a month ago, that doesn’t reflect well on you. Always be truthful about your relationship to your referees.
Good references are people who have known you for a long time and can vouch for your character. Current and previous employers, colleagues and managers make good references. If you’re self-employed, think about asking some of your long-term clients. If you’re a current or recent student, professors, teachers, or athletic coaches make good references.
Always ask someone if you can list them as a reference. It won’t look good if a landlord calls them and they sound surprised because you didn’t ask them for permission. Make sure your reference knows what you’re applying for and when they can expect to be contacted by potential landlords (i.e. over the next month as you submit applications).
A personal reference is someone you don’t work with and have known for a while, preferably at least a year. Good personal references can come from:
Teachers or academic advisors
Close childhood friends or their parents
Leaders of community organizations or social groups you were a part of
Academic, personal, or professional mentors
Close family friends
Do not list a family member or romantic partner as a personal reference. These people are generally considered too close to you to be able to provide an unbiased reference.
A poor rental history is a record of behaviour or actions that make you an undesirable tenant. A prospective landlord wants to know that you’ll pay the rent on time, fulfill your lease obligations, and take good care of the property.
Anything that indicates you haven’t done that in the past, such as late payments or evictions, will affect your ability to rent now.
Keep in mind that a lack of rental history cannot disqualify you.
Your rental history includes the following four areas:
Evictions and late payments might show up on your credit report or be revealed through reference checks. Gaps in your rental history can point to income instability or leaving leases early. If you’ve experienced housing insecurity in the past, explain that. If the gaps are due to travel or living with family, be sure to explain that also. When it comes to rental gaps, landlords mostly want to know that you didn’t end a lease early without cause.
An eviction itself will not show up on your credit report. However, if a landlord reported you to a debt collection agency, that will show up on your credit report.
In most provinces and territories, this kind of information will stay on your credit report for seven years. Be prepared for this information to surface during any background check and be ready to explain that the circumstances that led to eviction are no longer a concern.
You cannot change the past. The best way to change your history is to change your behaviour moving forward. Explain any blips in your record or poor past behaviour to future landlords. Show how you’ve changed by displaying proof of financial stability or reformed character. Having strong references or being willing to provide a co-signer can ease a future landlord's concerns.
If there is incorrect information on your rental history or credit report, always dispute it.
Unpaid balances and late rent payments can absolutely affect your ability to qualify for an apartment. This is particularly concerning to future landlords because it indicates you didn’t meet financial obligations to previous landlords.
Sometimes this happens accidentally. If you forget to pay your final utility bill or tell the utility company that you moved, your unpaid bill can go to collections and show up on your credit report.
Make sure you have no outstanding rent or utility payments due. Dispute any errors on your credit report so that it doesn’t impact your credit score and ability to rent in the future.
While you can still rent an apartment after bankruptcy, it might be harder.
You’ll have to prove to a future landlord that you’ve overcome the financial instability that led to a bankruptcy or consumer proposal. Landlords need to feel confident that you will be able to pay your rent moving forward.
In your application, focus on what’s changed since your bankruptcy and how you can prove it.
You can be approved for an apartment after bankruptcy. What’s most important is being able to show an ability to meet your current financial obligations. You can do that through proof of income, a positive credit history since bankruptcy, or rent receipts from previous landlords. Show that your financial situation has improved and that you have the income stability to pay your rent on time and in full. You can also get a co-signer to guarantee your lease.
Keep in mind that bankruptcy will stay on your record for at least seven years and a consumer proposal will stay on your record for three years. You cannot hide this from a future landlord. It will show up on your credit report or background check.
A landlord may ask for a background check as part of the application process. Background checks can include your employment history, rental history, criminal history, and credit history.
Landlords use background checks to help determine if you’d be a trustworthy tenant. They’re looking to confirm that you are who you say you are and that your rental or employment history matches what you’ve shared with them. They’re also looking for warning signs that may indicate you’re a risky or irresponsible tenant, such as evictions, bankruptcy, criminal convictions, or delinquent payments.
If you’ve misrepresented yourself, a landlord can deny your application.
Every city has occupancy standards that dictate the number of people who can live in a given apartment. In general, that’s two people per bedroom. So if you’re a family of five applying for a one bedroom apartment, your application will be denied. It doesn’t matter if you and your family are comfortable living in the space together, if it goes against local building codes, it’s not allowed.
Keep in mind that a landlord cannot disqualify you for having kids. They can reject your application because there are too many people on it, not because some of those people are children.
Landlords are allowed to ask if you have pets. In most places, they are also allowed to deny your rental application if you have pets and they prefer their unit to be pet free. Local laws differ across Canada. In Ontario, a landlord can deny your application if you have pets, however, no pet clauses are technically void. So you could say you don’t have a pet, move in with your pet, and they’re not allowed to evict you. In British Columbia, landlords are allowed to restrict the size, type, or number of pets.
Condos and apartment buildings have their own codes that may restrict pet ownership. Have an open conversation about this with your landlord to understand the building regulations and your rights as a renter.
While it’s frustrating to have your rental options limited because of your pet, don’t lie on your application. This will negatively impact your relationship with your landlord and any future reference they might give you.
Landlords are not allowed to ask if you smoke. They are however allowed to have a no-smoking clause in their lease. In most areas, landlords are allowed to ban or restrict smoking in all or parts of their building. That includes outdoor spaces like patios or balconies. Condos and apartment buildings will have their own regulations around smoking on the premises.
If you’re a smoker, make sure you know if and where you’re allowed to smoke (on private or shared balconies, etc.). This includes cigarettes and cannabis.
If a landlord requests documentation they are legally allowed to ask for and you’re unable to provide it, they can deny your application. What a landlord is allowed to ask for depends on local regulations. Typically that’s proof of income, credit history, and rental or personal references.
If you provide documentation that cannot be verified, such as proof of income, that’s considered a lack of documentation and they can disqualify you.
It is fraudulent to misrepresent yourself on a rental application. That includes lying about your name, your job, your income, your rental history, or your relationship to your references. If a prospective landlord finds inconsistencies between what you’ve shared on your application and what they discover through your credit history or reference checks, they can deny your application.
Always be honest about who you are. If there are aspects of your current financial situation or previous rental history that you think will reflect poorly on you, be honest about that upfront and explain your circumstances.
You can, but it might not be worth it.
Ask the landlord or leasing company why your application was rejected. If your application was denied because it was incomplete, ask if you can resubmit the application with the proper documentation. If your application was denied because of low income and you’re unable to provide a co-signer, it’s unlikely that they’ll reconsider your application because your situation hasn’t changed.
In most cases it’s best to move on and focus on improving factors within your control, such as your credit history.
Know your rights as a renter. A landlord can deny your application because of a combination of low or unverified income, poor references, poor rental or credit history, or because your application is incomplete. A landlord cannot discriminate against you based on your age, race, marital status, sexual orientation, or gender expression.
You do not need to have a perfect application or a flawless credit history to rent an apartment. You simply need enough to prove that you’re financially responsible, trustworthy, and able to pay your rent on time.
Kate is a Toronto-based writer and marketing communications consultant. Kate is a Qualified Associate Finacial Planner (QAFP) is passionate about having open and honest conversations about money. She's also really into crafting: she has 3 sewing machines.
Let's consider the options available to you if you've been denied for a rental application.
Nov 08, 2022
Most apartment rental listings stipulate that a credit check will be required, but you may be wondering what credit score you need to secure a rental.
Sep 20, 2021
If you are moving into your first apartment, there are a lot of expenses to budget for.
Nov 22, 2022