Tenant Screening in Canada: Credit Checks, Background Checks and What Is Legal

Choosing the wrong tenant is the most expensive mistake a landlord can make. Months of unpaid rent, property damage, and the time and cost of the eviction process can easily cost $10,000 or more. A proper screening process takes an hour per applicant and prevents the vast majority of these situations.

This guide covers tenant screening across Canada, with specific attention to what is legally permitted and what crosses the line.

What You Can Legally Ask (and What You Cannot)

Human rights legislation in every Canadian province prohibits housing discrimination based on protected grounds. While the specific list varies by province, the following are protected virtually everywhere:

• Race, colour, ancestry, or ethnic origin
• Religion or creed
• Sex, sexual orientation, or gender identity
• Family status or marital status
• Disability
• Age
• Receipt of social assistance (in most provinces)

Questions You Should Never Ask

• Are you planning to have children?
• What is your religion or ethnic background?
• Do you receive social assistance? (In Ontario, you cannot use this as a reason to refuse)
• What is your immigration status? (Unless verifying legal right to enter a rental contract)
• Do you have a disability?

Questions You Can Ask

• What is your current employment and income?
• Can you provide references from previous landlords?
• How many people will be living in the unit?
• Do you consent to a credit check?
• Do you have pets? (For buildings where pet restrictions are legally permitted)
• Why are you leaving your current rental?

Running a Credit Check

Getting Consent

You must obtain written consent from the applicant before running a credit check. This is required under federal privacy legislation (PIPEDA) and provincial equivalents. Include a consent clause on your rental application form that specifically authorizes you to obtain a credit report.

How to Run a Credit Check

Canadian landlords can access credit reports through:

• Equifax Canada: Offers landlord-specific credit reports. You can register for an account to pull reports with tenant consent
• TransUnion Canada: Similar service with landlord access options
• Third-party screening services: Companies like Naborly, SingleKey, and Certn offer tenant screening packages that include credit checks, often bundled with identity verification and background screening

What to Look for in a Credit Report

• Credit score: A general indicator, but not the whole picture. Scores above 650 are generally acceptable
• Payment history: Look for patterns of late payments, especially on housing-related debts
• Collections accounts: Multiple collections suggest chronic payment issues
• Total debt load: High debt relative to income means less capacity to pay rent reliably
• Bankruptcies or consumer proposals: Not automatic disqualifiers, but warrant further conversation

Employment and Income Verification

The general guideline is that rent should not exceed 30% to 35% of gross monthly income. Verification methods include:

• Recent pay stubs: Ask for the two most recent pay stubs showing employer name, pay period, and gross earnings
• Employment letter: A letter on company letterhead confirming position, salary, and employment status
• CRA Notice of Assessment: For self-employed applicants, this confirms reported income from the previous tax year
• Bank statements: As supplementary verification showing consistent deposits

For self-employed applicants, consider requiring three to six months of bank statements showing consistent income. Self-employment income can be irregular, so look at the average rather than any single month.

Landlord Reference Checks

Always contact previous landlords. Here are the questions to ask:

1. How long was the tenant in the unit?
2. Did they pay rent on time consistently?
3. How did they maintain the property?
4. Were there any complaints from neighbours?
5. Was proper notice given before moving out?
6. Would you rent to this person again?

Contact at least two previous landlords. The current landlord may have motivation to give a positive reference just to move a difficult tenant along. A previous landlord has no such incentive and is more likely to give an honest assessment.

Verifying References

Verify that the person you are speaking with is actually the landlord. Cross-reference the phone number with public records or the property address. Some applicants provide friends posing as landlords. A quick property ownership search or a call to the property management company listed on the building can confirm legitimacy.

Background Checks

Criminal background checks for tenants are a grey area in Canada. While not explicitly prohibited in most provinces, using criminal history as a blanket reason to deny housing can trigger human rights complaints, particularly if it disproportionately affects protected groups.

If you do request a background check, be transparent about it, obtain written consent, and consider the relevance of any findings to the tenancy. A decades-old conviction unrelated to housing is very different from a recent pattern of property-related offences.

Free vs. Paid Screening Options

Free Screening Methods

• Asking the applicant to provide their own credit report (consumers can get a free report from Equifax and TransUnion once per year)
• Calling references directly
• Verifying employment by calling the employer
• Searching public court records for LTB decisions

Paid Screening Services

• Naborly: Canadian company offering credit reports, identity verification, and risk assessment. Pricing varies
• SingleKey: Offers screening plus rent guarantee insurance. The screening may be free if bundled with their insurance product
• Certn: Background screening platform with landlord-specific packages

Building a Consistent Screening Process

The most important aspect of tenant screening is consistency. Apply the same criteria and process to every applicant. This protects you from discrimination claims and ensures you are comparing applicants on equal footing.

1. Create a standard rental application form that collects all necessary information
2. Establish minimum criteria (income ratio, credit score range, positive references) and apply them uniformly
3. Document your screening process and the reasons for your decisions
4. Keep all applications and screening records on file

Good screening is not about finding perfect tenants. It is about identifying and avoiding high-risk applicants while treating everyone fairly and within the law. The time you invest in screening pays for itself many times over in avoided problems down the road.