Launched in 2021, Chexy was the first Canadian payments experience that afforded tenants the possibility of paying home rent via plastic card.
Users can get cash-back and other rewards from spending on a card—both on rent and at Chexy partner brands—while also building credit.
Split rents—as easy as splitting an Uber, the fintech says—and other features are managed from the tenant side, with minimal involvement from the landlord. Chexy pays the landlord his or her rent via e-transfer or deposit.
There is a free “Lite” tier that allows one to pay rent with a card, but to reap the product’s credit-building benefit, one must subscribe to the platform as a “Reward” member.
“You do not have to report your rent to credit bureaus, it’s entirely up to you,” the Toronto-based startup affirms. “However, when you opt in to Chexy Rent Reporting, every on-time rent payment helps build your credit.”
Chexy believes building credit through rent is an important step toward homeownership.
“By building credit, you increase your chances of qualifying for loans like mortgages and unlock better terms,” the company says.
It is estimated that more than three million people aged 18-plus in Canada are “credit invisible,” according to Equifax, meaning these individuals either do not have a credit file or the credit information on file is insufficient to generate credit scores. An additional seven million may have two or less credit accounts on their credit file, which is considered limited credit history—a “thin” credit file.
Individuals that are credit invisible or have limited credit information on their file “may have difficulty accessing credit products and housing and may pay higher interest rates which can perpetuate a cycle of financial stress,” the company warned recently.
That is why Chexy is at the forefront of “Rent reporting,” an emerging feature among fintechs.
“This has some really interesting implications … given that rent tends to be (for most of us) our largest monthly expense,” reads the company’s blog. “The implications include getting into a better rental and—arguably more important for many of us—owning a home sooner.”
Relying “on the backbone of your budget to continue to build credit” is an especially important feature as we all face economic headwinds, Chexy believes.
“The arrival of rent reporting could not come at a better time,” the startup stated.
As rent reporting ramps up in Canada, Chexy is looking to enter its next phase of growth via Intuit’s Prosperity Accelerator in Toronto, which it was recently accepted into.
The four-month program sees fintech startups “refine and scale products designed to improve the financial prosperity of Canadian consumers and small businesses and combat their most pressing challenges.”
Highline Beta, which runs the program, anticipates the Prosperity Accelerator will provide fintech startups with increased visibility in the investment community “at a critical time for the industry,” with numbers down across the country.