Newcomers with no credit history in Canada are turning to rental guarantee firms in their bid to find housing, increasing their monthly shelter costs by up to five percent in an already red-hot rental market.

In their search for rental housing in Canada, newcomers face landlords’ expectations of a credit history — a requirement that typically takes six to eight months to build with a bank-issued credit product. While various banking and financial institutions are devising ways to accommodate the credit needs of newcomers, rental guarantee services help to mitigate these challenges within the rental market.

The services aren’t free; companies charge as much as five per cent of the monthly rent, but they can be helpful, especially in cities where the competition is fierce for rentals.