Given that renting an apartment is a crucial step in beginning life after school or when you move to a new place, you want to ensure that your credit score will allow you to acquire suitable digs. Credit is an important factor in renting an apartment for a number of reasons, according to U.S. News and World Report.
Credit score can help you get an edge over competition when renting an apartment
A credit score can have a major influence on your ability to gain an advantage over prospects for an apartment. A tenant who is irresponsible and continually late with rent will be a serious headache for a landlord, so it makes sense that landlords check a credit score prior to granting an individual an apartment. However, don't worry if your credit score isn't perfect. Lexington Law.com suggested that qualifying for an apartment is easier than other purchases, such as a mortgage. Prior spending and purchasing habits will be a good indication of how a tenant will treat rental payments. U.S. News and World Report listed credit score as one of the most prominent factors in renting, coming second only to an income-to-rent ratio.
There are many easy tips and habits that can assist in raising your credit score if you're thinking about renting a new apartment. One notable example U.S. News and World Report suggested is to pay minor bills on time. Making a habit of always paying bills on time will be a prominent way for a landlord to tell that you will be a reliable tenant – so, if you always pay larger debts on time, such as your share of a student loan, but sometimes miss deadlines for a more minor bill, you want to quickly make sure that this gets taken care of on time as well.
U.S. News and World Report suggested that small problems with bill-paying can have a negative effect on a credit score. Therefore, when thinking about the various contributing factors to a good credit score, it helps to keep in mind the large impact small, everyday purchasing and bill-paying habits can have on a credit score.
Opt for cash over credit for some purchases
Another tip is to avoid using a credit card for large quantities of items. Accidentally overspending and going into debt will also have negative effects on credit, and could damage your chances for obtaining an apartment, so fiscal responsibility should be a paramount concern at all times. U.S. News and World Report noted that a person should avoid going too far over their credit limit, suggesting that using above 20 percent of a particular credit card limit will have negative effects on credit. Another factor that can be troubling when using a credit card constantly is the chance it allows for people to grow absentminded and forget to keep track of how much they are spending. Keeping written records will be an easy way to cross-check the amount you are spending with what you have in the bank.
News in the U.S. suggests that the credit risk of rental applicants is increasing, according to Multi-housing News.
"This is great news for both renters and property managers," says Michael Doherty, senior vice president of TransUnion's rental screening solutions group, according to the source. "We continue to see improvement in the credit risk of renters, which gives them more opportunities to receive better rental terms. This is a continuation of a trend we have now observed for the last few years. With the advent of rental reporting to TransUnion, improvements in credit risk will also help renters build their credit by making on-time, monthly rental payments."