Why is my credit score different on SingleKey?

Why is my credit score different on SingleKey?

You may have noticed that when you run your tenant report on SingleKey, the score turns out a bit different than what you’ve previously received. Don’t worry – this is totally normal, and we’re going to break it down for you.

The Real Reason Why Your Credit Score Is Different

When you run your report through Equifax, what you receive is something called the FICO Score, which is a model that’s mainly intended for your own educational use. The FICO Score is also used by large institutions to determine risk and is only one of many score models used by lenders.

The score you receive through SingleKey, on the other hand, is called the Equifax Risk Score, or ERS 2.0. Both the FICO and the ERS 2.0 are popular and legitimate scores powered by Equifax’s data, but because the two models factor in different information in their calculations, they will produce slightly different results.

Equifax Risk Score (ERS 2.0)

The Equifax Risk Score is a risk prediction tool that evaluates a your economic behaviour. It forecasts the likelihood of you going more than 90 days delinquent within the upcoming 12 months. 

Click here to learn more about what is considered to be a good or bad tenant credit score. 

FICO Score (Fair Isaac Corporation)

The FICO Score is another metric that lenders use to determine the likelihood of  you repaying your debt. It takes a look at  your financial history and looks for consistency.

FICO Scores are calculated based on: payment history, credit utilization, length of credit history, credit mix, and new credit.

The Canadian average FICO Score is 650 – 700. Where does your FICO credit score compare to others?

Remember

Both credit score ratings are typically within similar ranges. If there is a variance of 100+ between one’s credit score on both scales, there is a chance that either one has been altered.

Why Are There Different Credit Score Models?

Through Equinox alone, there are more than seven different proprietary score models. All of them are true reflections of your credit score and shouldn’t be compared in terms of “accuracy.” Each of these models weigh your data and information differently, which is why they result in different scores.

The varying score models are used by different institutions depending on their needs. In addition to scores mainly used to educate, there are also score models based on lending criteria. What your bank will look at when deciding your credit limit or issuing a new card, for instance, will not be based on the same score model as your mortgage lender. This is why SingleKey’s tenant report, in addition to weighing a tenant’s financial health through the ERS 2.0 credit score, also considers other factors specific to the rental process.

Stay Informed, Always

If you’re looking to compare your credit score across different platforms, always ensure that you are using the same scoring model. Additionally, because your scores are constantly being updated, make sure that you’re comparing these scores at the same time. As the credit bureau’s model receives live information, it’s likely that your credit score today won’t be the same tomorrow.

Now that you have a better understanding of SingleKey’s credit score model, you can get started on running your own tenant credit check – it only takes five minutes!

If you have more questions about your tenant report or understanding your credit score, don’t hesitate to get in touch with our team of experts to clear up any confusion.

Cost of Evicting a Tenant: the Ultimate Guide for Canadian Landlords

cost of evictions in Canada
cost of evictions in Canada

One of the biggest risks you’ll face as a landlord is a tenant who doesn’t pay their rent. While you can do your best to screen for quality tenants, there’s still no guarantee of a steady flow of rent payments. Unexpected issues may arise, causing them to fall behind or outright refuse to pay.

In addition, tenants may also become a nuisance, blatantly violate the rules of the lease agreement, or cause damage to your rental property

Sometimes, negotiating a payment schedule with the tenant for past due rent or issuing a verbal or written warning can solve the problem. But, in some cases, there’s no other solution but to evict them from your property.

So how do you go about evicting a tenant in Canada? What does the process entail, and how long will it take to get the job done? And most importantly, how much will it cost you?

As a landlord in Canada, you need to keep three things in mind when calculating the cost of evicting a tenant:

A. Loss of Rental Income During Evictions

The only recourse that landlords have to deal with non-payment of rent and tenants who refuse to leave the unit is to go through the provincial tribunal or court to file for tenant eviction.

The problem is that the process of eviction in most provinces suffers mainly from long delays due to a high backlog of hearings. So it takes a long time  to carry out eviction procedures from start to finish.

The duration of the eviction process in Canada depends on three things:

Statutory Delays

A statutory delay is the length of time you must wait before requesting an eviction order through the tribunal or Court to remove a tenant. It varies from province to province.

This time frame gives the tenant a chance to pay you any outstanding rent. Once the statutory delay expires, you can apply for an eviction order based on non-payment of rent.

How long does it take to evict a tenant for non-payment of rent in each province?

In British Columbia, a landlord must issue a 10-day notice to end tenancy for unpaid rent when a landlord fails to pay rent by the agreed upon date. Within the 10 days, if the tenant fails to pay the outstanding balance of rent, a landlord must wait the respective 10 days before they can apply to the Residential Tenancy Branch to claim the lost rental income.

When a landlord wishes to remove a tenant in Alberta, the landlord is to serve the tenant with a 14- day notice to vacate the unit.

In Saskatchewan when a tenant is 15 days late to paying rent, the landlord has the right to immediately end the tenancy by serving the tenant with an eviction notice.

In Manitoba a landlord is entitled to evict a tenant 5 days after the rent is due. On the 5th day, the landlord can ask the tenant to vacate the unit and has full discretion in determining how soon the tenant should vacate the unit.

The average amount of time given to tenants to allow them to leave is between 5 and 10 additional days (this is at the discretion of the landlord as there is no guidance on this).

In Ontario, eviction proceedings take at least 25 days.

First, a landlord must issue a Termination Notice (N4 Form) when the tenant is late on rent, then they have to wait 14 days to file an application for eviction (L1 Form) with the Landlord and Tenant Board to evict the tenant.

In addition to this initial 14 days, and unlike any other province, there is also a statutory requirement that the landlord must wait an additional 11 days to allow the tenant to either pay the outstanding balance or vacate the unit before the landlord is allowed to hire a sheriff to enforce the standard order.

In Quebec, the landlord must wait 3 weeks from when the payment was initially due before filing to evict a tenant. Once a tenant is 21 days late, the landlord can then apply to the Tribunal to end the tenancy, remove the tenant, and recover the lost rent.

Following the application for eviction after 21 days, if the tenant pays the outstanding balance to the landlord before the Tribunal reaches a conclusion, then the termination of the tenancy is avoided.

In Nova Scotia, a landlord can only serve a delinquent tenant with a notice after their rent is 15 days late. Further, a landlord must wait an additional 15 days from the date the tenant is handed the eviction notice before the eviction can be carried out, totalling a minimum of 30 days of mandatory wait time before a tenant can be evicted.

In PEI, a landlord can issue a notice to evict the tenant as soon as rent is 1 day late. The tenant then has 20 days to vacate the unit. If they manage to pay the outstanding balance within 10 days, then the eviction notice is invalidated.

Similar to PEI, in New Brunswick the landlord can issue an eviction notice to a tenant as soon as rent is 1 day late. The tenant then has 15 days to vacate the unit.

In Newfoundland when a tenant is 5 days late in paying rent, a landlord will then serve a tenant with notice that the tenancy has ended, and the tenant then has 10 days to vacate the unit amounting to an average of 15 days for the entire eviction process.

Court Delays

Court delays refer to the time between issuing an eviction notice to the tenant and when the arbitrator decides on a verdict. This time frame includes delays in scheduling a hearing date and all the arbitration proceedings until a final decision is made regarding the case.

How long does it take to get an eviction court order?

In British Columbia, after a landlord files the appropriate 10-day notice to end tenancy for unpaid rent and a tenant has not paid all outstanding rent or vacated the unit, the landlord must then proceed to claim the unpaid rent amount with the provincial tribunal (the RTB).

In BC, the tribunal can take 1-2 weeks to schedule a hearing for the two parties to plead their case depending on the availability of arbitrators and their caseload. Following the end of the arbitration, the tribunal will make the final decision within 30 days of the hearing.

In Alberta, it can take as little as 5 days to as much as 48 days for a landlord to have a hearing scheduled. On average, it takes 25 days after filing a dispute to get a hearing scheduled. Following the conclusion of the hearing, it takes an additional 10 days for the arbitrator to reach a final and binding decision. Depending on the outcome of the possession order, a landlord may further need to wait between 10 to 30 days before they can regain possession of the unit.

In Saskatchewan, due to the lighter caseload, hearings are scheduled approximately 7 days from when the claim is brought the tribunal.

Manitoba’s court system adds an additional 15 days in lost time. This is because it takes approximately 12 days for the hearing to be scheduled. Following the hearing, the arbitrators release the final outcome after 3 days.

Ontario’s court delays total an average of 51 days. It takes 14 days for the provincial tribunal to schedule a hearing. When the hearing date is set, it is typically scheduled for 4-6 weeks later.

Similar to Ontario, Quebec’s tribunal system is subject to heavy delays. It can take up to 3 months in some cases for a tribunal to release a final decision. However, on average, it takes 30 days for a final and binding decision to be made.

For Nova Scotian landlords, it can take up to an additional 20 days to receive a verdict for eviction. This is a combination of delays in scheduling the hearing and waiting for a conclusion by the arbitrator to be reached. 

In PEI, the provincial tribunal prioritises eviction hearings over other landlord-tenant disputes. So hearings are scheduled between 7 – 10 days after the landlord brings forth the claim to the tribunal.

New Brunswick boasts the shortest court delay length across Canada. Landlords there face shorter wait times as it takes an average of 5 days for the court to issue their decision.

In Newfoundland, after requesting a hearing at the Residential Tenancies, there is an additional 14 day wait before the hearing is conducted. While the average length of delay is 14 days, tenants, in some cases, can have up to 18 days to file an appeal and have the case reconsidered.

Sheriff Delays

In some cases, you’ll need to hire a sheriff to enforce an Order of Possession or a Court order to remove the non-paying tenant. Naturally, this step will lengthen the eviction process.

How long does a sheriff take to evict a tenant?

In every province except Ontario, it takes between 1 and 6 days for the sheriff to enforce an eviction. 

Due to a backlog of cases in the Landlord and Tenancy Board (LTB), removing a tenant in Ontario takes much longer. As a result, you can expect to wait up to 30 days for a sheriff to uphold an eviction order. 

The delay in enforcement is one of the reasons carrying out an eviction in Ontario takes much more time than in other provinces. As the graph below illustrates, the process takes approximately eight times longer than the rest of Canada.

How Long Does the Eviction Process Take in Total?

It takes between two and three months to remove a delinquent tenant, depending on your province. Ontario has the most prolonged procedural delays in the eviction process, while Saskatchewan experiences the shortest delays.

So how much rent in total can a landlord expect to lose?

You can calculate the total amount of rent you can expect to lose during an eviction using the following formula:

TOTAL LOST RENT $ = AVG EVICTION TIME (+1 MONTH TO FIND A NEW TENANT) X AVG MONTHLY RENT $

To determine the total cost in lost rent, you’ll need to estimate the monthly average rent and utilities in your province:

Besides the loss of regular rent payments, you can expect to spend about one month posting ads, screening applications, and signing a lease with a new tenant. You may also need to include the cost of repairs to your rental unit resulting from damage done by the delinquent tenant. 

 In addition, you’ll need to tally up all the legal expenses, court fees, etc., you’re likely to incur during eviction proceedings.

The average landlord renting a 1-bedroom unit can expect to lose $2,000 to $4,000 in rent during an eviction. In Ontario, landlords are subject to much higher losses as Ontario landlords can expect to lose $9,000 in rent! The higher amount is due to the lengthy eviction process in Ontario (three to five months long) combined with the higher average rent prices.

B. Eviction Legal Costs

In addition to lost rental income during the eviction process, you may face thousands of dollars in legal expenses.

There are 3 types of legal costs:

Legal Fees

Legal expenses mainly include the cost of hiring a paralegal to deal with a case on your behalf. Paralegals will file relevant paperwork, handle the eviction hearing, and conduct negotiations that may be necessary throughout the process.

Legal Costs For Eviction in Canada

In British Columbia, Alberta, Saskatchewan and Manitoba, it costs between $700 and $800 to hire a paralegal to carry out the eviction process. 

However, in New Brunswick, Nova Scotia, PEI, and Newfoundland, the average cost ranges from $400 to $500.

Unsurprisingly, Ontario and Quebec are the most expensive provinces for legal assistance due to longer eviction processes. In Ontario, legal fees cost $2,000 on average, and in Quebec, they cost $1,000 on average.

Court Fees

Court fees cover the cost of filing a claim through a Court or a tribunal. Generally, you can expect to pay between $50 and $100.

Once again, Ontario remains the outlier, as the cost to file an eviction application with the LTB is $186.

Sheriff Fees

The cost of hiring a sheriff to enforce an eviction order varies widely across Canada. On average, you can anticipate paying $100 to $200.

In Ontario, due to the high demand for sheriffs, a landlord can spend approximately $400 to remove a delinquent tenant.

On the other hand, landlords in Newfoundland, PEI, and New Brunswick pay a measly $50 to $75 for the same service.

C. Estimated Property Damage Costs

Lost rental income is already one of the scariest expenses you can face as a landlord. But it’s much worse if the delinquent tenant causes damage to your unit before vacating it.

In Canada, 1 in 6 eviction cases includes a claim for compensation for damages to the unit on top of lost rent. The average landlord claims $1,500 and $3,500 in court against a tenant for property damage 

Damages caused by a tenant can substantially increase your financial loss following an eviction, as you must spend money on repairs. You also lose rental income over an extended period since you need more time to make the unit move-in ready for a new tenant. 

It can take 1-2 weeks to do simple repairs to the property. You may not be able to recover the total amount in damages through the court system and be forced to cover some expenses out of pocket.

What is the total cost of eviction?

The costs that come with evicting a tenant can be substantial. Over the entire eviction process, you can expect to lose about two months of rental income if you decide to end a tenancy. And this figure doesn’t include, on average, the additional month of lost income before you find a replacement tenant.

The average cost shouldered by landlords across Canada is $4,000 to $5,000 in eviction expenses. These costs can even reach $11,000 in more expensive provinces with lengthy processes, such as Ontario.

How do landlords protect their rental income and keep renting risk-free?

As a landlord, the first step you should take to protect your rental unit from delinquent tenants is to properly screen them before signing a lease agreement. A solid screening service will provide valuable insight into tenants’ financial history and background. You can then use the information to help you choose the ideal tenant.

SingleKey offers a comprehensive Tenant Credit and Background Check that includes a full credit check and a background check with a social media scan. All these vital details are packed in a single report, which you can have at your fingertips in as little as 5 minutes!

Dealing with non-paying tenants can be a financial nightmare, even more so if you need to remove them from your property. After all, you become a landlord to earn passive income, not pay a mountain of expenses! If you’re looking for peace of mind when it comes to your rental income, be sure to check out  SingleKey’s Rent Guarantee Program. By signing up, you’ll receive coverage for up $60,000 in lost rental income should your tenant fail to pay their rent.

How to Screen for Great Tenants

“It’s none of your business what my credit score is!!” How’s that for a start?

Tenants that are soon to live in your property can come in all types : good, bad, really bad. This is why you should do your due diligence before renting out your unit.

If it sounds stressful, don’t worry!

Luckily, we’ve put together a step-by-step guide to screen for great tenants and included some tips along the way. 

1. Looks are Deceiving, A Credit Report is Not

After narrowing down your potential tenants to a short list, it is time to select the best one.

A credit report reveals a detailed breakdown of an applicant’s credit history. Credit bureaus are responsible for collecting financial information and a credit report is a great tool to get this info.

An individual’s prior financial history is a good indication of what they will do in the future. Chances are that if someone consistently pays their bills on time, they are most likely to pay their rent on time as well.   

Here is what to look out for in an Equifax credit report: 

    1. Personal Information – such as tenant’s name, address, date of birth and employment information. Make sure that this information matches the info on rental application.
    2. Payment Behavior – how often the applicant is late on their debt payments. Poor payment behaviour will be reflected in the credit score. 
    3. Credit Accounts Information –  the types of accounts, when they were created, the limits and amounts for these accounts as well as payment history.
    4. Debt Type and Amount – The debt amount is not the only important factor, mortgage debt is much safer than credit card debt and as the interest rate will be much lower.
    5. Type of Inquiry –  hard credit bureau inquiries can negatively impact the tenant’s credit score if done too often, soft inquiries do not. A tenant credit check is a soft inquiry.
    6. Public Records and Collections – from public court records such as bankruptcies, collections files, convictions and sometimes past eviction judgements.

View our comprehensive
tenant screening report

2. No Income, No Rent

Credit check looks good? Awesome! 

But how often has your tenant switched jobs and addresses? If the answer is “often”, there is a chance you may have an unexpected vacancy in the near future.

These tenants may have the risk of losing their income and not being able to cover rent.

Another thing to consider is that individuals who work for a salary usually have a safer way to make money rather than those who depend on self-employment or freelance contracts. 

So what should you do? 

Always check the tenant’s source of income, check its reliability and compare it to the required rent payments. Alongside their income, double check their prior addresses and employment history to make sure they’ll be able to pay rent on time.

Not only this, but find out the amount of debt your prospective tenant has, and the monthly interest they are paying. This is important because if your tenant is paying $1000 or more in debt payments, they may not be able to afford the rent.

This credit report will tell you exactly what their total monthly debt payments are.

Tenant rent to income ratio screening tenants credit check

Quick Tip

Create a rent-to-income ratio. Take your prospective tenant’s monthly rent and divide it by their monthly household income. If the rent is over 30% of their income, recognize they are more likely to be delinquent.

An ideal candidate should have additional income to cover the rent payments in the case of unexpected expenses. 

If your tenant has been consistently changing addresses and jobs, be wary of them doing the same with you.

3. Run a Background Check

A background check is used to investigate a candidate’s history. It generally includes employment, education, criminal records, credit history, motor vehicle and license record checks. 

So how do I run a background check? 

It’s easy! All you need is:

  1. Tenant’s Full Name
  2. Driber’s license or Social Security Number (both optional)
  3. Date of Birth
  4. Current Address

4. Contact the Previous Landlord

The more information, the better. See if it is possible to contact the former landlord. Chances are the previous landlords will happily share their experience with your prospective tenant. They will relate to and understand your questions and will be inclined to help a fellow landlord.   By reaching out, you would be surprised by what you can find out!  While respecting the landlord’s time and not being too pushy, you should look to acquire more insights on the prospective tenant. Here are some sample questions that you can ask the former landlord:
  • Has the tenant paid you all the rent?
  • Does the tenant pay on time?
  • Has the tenant caused damage to your property?
  • Were they respectful towards the neighbors?
  • Would you rent out your property to this tenant again? 

Quick Tip

It is always better to try and contact more than one landlord in case they are just trying to get rid of their past tenant.

5. Join a Facebook Group

Have a question stuck on your mind but don’t know who to ask? Join a Facebook group of landlords from your province. 

Members of these groups share stories about their experiences and will provide advice that can help you with your current situation.

They will also often share information amongst the group about delinquent tenants and it might save you hours of figuring that out on your own. 

The Facebook admins assist with all questions relating to the Residential Tenancies Act and will help answer your questions!

Landlord Facebook Groups Across Canada

6. Interview the tenant

Have you taken all the steps to screen for a great tenant? Well, it still might not be enough. You can spend weeks screening a tenant but sometimes your instincts are the best judgement. 

Think of the screening as weeding through the candidates that you certainly do not want living in your property.

Quick Tip

When hiring a realtor, their objective is usually to find a tenant in the shortest amount of time. So you might end up with an average tenant rather than a great tenant, which may result in problems over time.

After thoroughly screening your prospective tenant and confirming they’re good on paper, talking to them over a cup of coffee might be the best screening of all.

“Talk to them? About what?” 

Well, first things first, ask about what you want to find out. You should ask about their past renting experience, and see if their story aligns to their references and feedback from past landlords. 

An easy way to start up that conversation is by saying “I know how difficult landlords can be when it comes to their property. How was your past relationship with the landlord?”

You might just find out that they’re in court right now for an eviction.

Final Word

As a landlord, you cannot rely on the paperwork alone to carry out a tenant background search. You have to be creative and willing to engage with tenants on a personal level. Conversations can help you better understand the way your tenants relate to others and how they handle conflict, all of which are essential to achieve the best tenant screening.

Following these 6 steps will minimize the risk involved in renting your unit. Investing in proper tenant screening pays off down the road. With SingleKey, you can get a comprehensive tenant screening report in minutes, including a background check, credit report, employment history, past addresses and evictions, and criminal record.