Finding responsible tenants is one of the most crucial tasks for landlords, as the right tenant can mean the difference between a smooth rental experience and costly disputes. A well-executed tenant screening process not only safeguards your investment, but also minimizes risks such as late or missed rent payments, property damage, and potential legal complications. In this guide, we walk through key tenant screening services, including credit checks, employment and income checks, reference checks, and considerations around criminal record checks.
What is Tenant Screening, and Why is it Important?
Tenant screening is a critical process that allows landlords to assess prospective renters based on their financial stability, rental history, and overall reliability. It’s important because it protects your rental investment by ensuring that you select responsible, financially stable tenants who are likely to pay rent on time and care for the property.
Beyond financial considerations, a thorough tenant screening process helps create a more predictable and stress-free rental experience. A good tenant contributes to a positive landlord-tenant relationship, reducing conflicts and turnover rates. Ultimately, it’s about making informed decisions that safeguard your property while fostering a stable and respectful rental environment.
What Should I Include in Tenant Screening?
A successful tenant screening process involves multiple steps to ensure that prospective tenants are financially responsible, reliable, and a good fit for your rental property. Below, we explore the essential components of tenant screening and how each step contributes to finding trustworthy tenants.
Credit Checks
A credit check is one of the most effective ways to assess a tenant’s financial reliability. It provides key insights into a prospective tenant’s ability to manage their financial obligations, including rent payments. A thorough credit check can help minimize the risk of missed payments, lease violations, or financial instability. Read more about how Certn helps Rent with Advent with their credit check process for compliant tenant screening.
How to Conduct a Credit Check
In Canada, you can obtain a prospective tenant’s credit report through the two major credit bureaus, Equifax and TransUnion. These tenant screening services are often more user-friendly and convenient, particularly for independent landlords who prioritize efficiency and prefer an all-in-one solution for tenant screening.
Additionally, there are third-party tenant screening services, such as Certn, that are integrated with credit bureaus and can offer credit reports along with other background screening services. Instead of going through the process of setting up direct accounts with credit bureaus solely for tenant screening purposes, you can use these third-party vendors that bundle credit checks with other essential tenant screening services—such as employment verification and criminal history checks where permitted—allowing landlords to access comprehensive tenant insights in a single place. This not only saves time but also simplifies the decision making process, making tenant screening more efficient and accessible.
Landlord Credit Check Process
- Obtain Written Consent From the Tenant: Canadian privacy laws require landlords to secure written permission before requesting a credit report. This goes for all background screening. For details, you can refer to the Office of the Privacy Commissioner of Canada website. This is a legal obligation in most provinces, including Ontario, British Columbia, and Alberta. The consent should be documented in writing, typically as part of the rental application.
- Collect Necessary Tenant Details: This includes the applicant’s full name, date of birth, and current address, which are required to request a credit report.
What Does a Credit Check Show
A credit report provides a comprehensive overview of a tenant’s financial history. Key components that show up as part of a credit check for tenant screening include:
- Credit Score – A numerical representation of the tenant’s creditworthiness. A higher credit score often indicates responsible financial behaviour and reduces the risk of late or missed rent payments. However, a lower credit score does not necessarily mean a tenant is unreliable—it’s important to consider additional factors such as rental and employment history.
- Outstanding Debts – Details of credit card balances, loans, and unpaid bills. A tenant with excessive outstanding debt may struggle to meet additional financial obligations, including rent.
- Payment History – A record of past payments on credit accounts and loans. Consistently making payments on time suggests a tenant is financially responsible, whereas frequent late payments or defaults could indicate potential risk.
- Types of Credit – A credit check for tenant screening also shows the variety of credit accounts a tenant has, such as credit cards, installment loans, or mortgages. A diverse credit mix can reflect responsible credit management.
- Credit History – The length of time the tenant has maintained credit accounts. A longer credit history typically suggests greater financial experience, whereas a shorter history is common among students, younger tenants, or newcomers to Canada. Shorter histories don’t necessarily indicate financial irresponsibility.
- Recent Credit Activity – Any new credit accounts or recent inquiries into the tenant’s credit file. A surge in new credit applications may suggest financial distress.
- Negative Information – Records of missed or late payments, accounts sent to collections, bankruptcies, and other financial red flags that could indicate instability.
By carefully evaluating the credit report as part of your tenant screening program, you can make informed decisions and find reliable tenants for your properties. However, a credit report shouldn’t be the sole determining factor in tenant screening. It’s important to balance due diligence with fairness, allowing prospective tenants the opportunity to explain any negative marks on their credit reports. Other factors, such as rental history, employment and income verification, and reference checks, also play a crucial role in tenant screening.
Employment and Income Verification
A tenant’s ability to pay rent consistently depends on a stable and sufficient income. The 30% threshold remains a widely used benchmark for measuring housing affordability in Canada—meaning a tenant’s monthly rent ideally shouldn’t exceed 30% of their gross income. In tenant screening, verifying employment and income helps landlords assess financial stability and reduce the risk of missed payments.
How to Verify a Tenant’s Employment and Income
You can verify a tenant’s employment and income through:
- Pay Stubs and Employment Letters – Request recent pay stubs or an official employment letter confirming the tenant’s position, salary, and length of employment.
- Tax Returns and Bank Statements (for Self-Employed Tenants) – If the tenant is self-employed or a freelancer, ask for tax returns, bank statements, or other proof of consistent income.
- Direct Employer Contact – With the tenant’s consent, landlords may contact the employer directly to confirm employment status and stability.
As an alternative, many landlords and property managers use trusted third-party tenant screening services to streamline the verification process and reduce fraud risks. These tenant screening services provide quick and reliable income verification without requiring direct employer contact.
Identity Verification
Verifying a tenant’s identity is a crucial step in the tenant screening process, ensuring that the prospective tenant is who they claim to be and helping prevent fraudulent rental applications. Identity fraud is a growing concern, and you should take proactive measures to confirm a prospective tenant’s legitimacy before proceeding with a lease agreement.
How to Verify a Tenant’s Identity
- Request Government-Issued Photo ID – Common forms of identification include a driver’s licence, passport, or permanent resident card. Ensure the ID is valid and matches the information provided on the rental application.
- Compare ID with Other Documents – Cross-check the details on the tenant’s ID with supporting documents such as pay stubs, bank statements, or utility bills to confirm consistency.
- Use Third-Party ID Verification Services – Many tenant screening services, including Certn, offer digital ID verification solutions that use biometric checks and fraud detection technology to confirm a tenant’s identity. These services enhance security and streamline the verification process. Need help? You can view Certn’s tips on choosing an ID verification service.
Rental History and Reference Checks
A tenant’s rental history provides valuable insights into their reliability, responsibility, and past behaviour as a renter. By verifying past landlord experiences, you can assess whether an applicant has a history of on-time rent payments, property care, and adherence to lease agreements.
How to Conduct Rental History and Reference Checks
Traditionally, landlords contact previous landlords directly to inquire about the tenant’s rental history.
Key questions to ask include:
- Did the tenant pay rent on time?
- Did they take care of the rental property?
- Were there any lease violations, complaints, or disputes?
- Would you rent to this tenant again?
However, verifying rental history manually can be time-consuming and may not always yield objective results. Some tenants may provide false or unverified references. To streamline the process, you can use third-party tenant screening services that offer automated rental history reports.
These services may help:
- Verify rental payment records through property management systems.
- Contact previous landlords and collect structured feedback.
- Identify past evictions or legal disputes involving the tenant from public records.
By leveraging these tenant screening services, you can reduce the risk of fraudulent references, save time, and gain a more accurate picture of a tenant’s past renting behaviour. If a tenant has no rental history (e.g., they’re a student or first-time renter), consider alternative references, such as employers or personal references.
Criminal Record Checks
Criminal record checks can be a sensitive aspect of tenant screening. While some landlords may view a criminal record check as a way to assess potential risk, it’s important to carefully consider legal and ethical implications before requesting one. Misuse of criminal record checks could lead to human rights violations and potential legal challenges.
You should be aware that criminal record checks are regulated differently across Canada, and rejecting a rental applicant solely based on a past conviction could be considered discriminatory in some provinces. For more information on criminal record checks in Canada, see Certn’s Criminal Record Checks Canada FAQs.
Provincial Criminal Record Check Considerations:
- Ontario: The Ontario Human Rights Code doesn’t explicitly prohibit or permit the use of criminal background checks in rental housing. However, requiring a criminal record check as a condition of tenancy could disproportionately impact individuals protected under human rights legislation.
- British Columbia and Alberta: While criminal record checks aren’t explicitly restricted, landlords must ensure they don’t violate human rights laws when making rental decisions.
- Other Provinces: Each province may have specific regulations regarding how and when landlords can request and use criminal record checks.
How to Stay Compliant When Using Criminal Record Screening Services
As we’ve described, there are different sets of considerations when conducting criminal record checks for tenant screening than as part of pre-employment background screening. If you choose to include a criminal record check in your tenant screening process (and it’s permitted in your jurisdiction), consider the following best practices:
- Obtain Written Consent – Always secure the tenant’s written permission before requesting a criminal record check.
- Assess Relevance – Consider whether the offence on the criminal record has any direct impact on the tenancy.
- Avoid Blanket Policies – A blanket rejection policy for anyone with a criminal record could be discriminatory. Instead, review each case individually.
- Use Reliable Screening Services – Third-party background screening services, such as Certn, offer a secure and efficient way to conduct criminal record checks while ensuring compliance with privacy and human rights regulations.
By taking a fair and legally informed approach, you can make well-balanced rental decisions while ensuring that criminal record checks are conducted in compliance with provincial regulations and human rights laws. A thorough, yet ethical, tenant screening process helps you find responsible renters while promoting fairness and transparency in the rental market.
Need a trustworthy tenant screening vendor? Talk to an expert at Certn today to streamline your tenant screening process with fast, accurate, and compliant background screening! If you need to run a background check on yourself, try Certn’s MyCRC personal background check service.
