When you apply for a new rental, your credit score can have a big impact on whether or not you’ll beat out the competition and land the apartment. In fact, a recent Rent.com survey of property owners and managers found that after income-to-rent ratio, a potential tenant’s credit score was the second most important factor to a landlord leasing a rental.
However, it’s not a very surprising finding — a high credit score indicates that you pay your bills on time and are likely to continue doing so. Property managers look for candidates with high scores because they feel they can trust those renters to pay their rent.
If you’re having trouble securing a new apartment because your credit is less-than-stellar, there are things you can do. It will take some work and some time, but you can bounce back from a low credit score. Here are some tips to move you in the right direction:
Apply for a credit card. If you don’t have a credit card, consider getting one. When used wisely, a credit card can help you build a credit score from the ground up or improve the one you already have. The key here is “a” credit card — as in one. When you have several credit cards, each with a balance, you accumulate nuisance balances. For instance, you might have $50 on one card, $30 on another and $60 on a third. If you have all these little balances and don’t pay them off on time, it can lower your credit score.
Stop using your credit card for everything. Credit cards can be sneaky. Even if you’ve managed to pay all your balances in full and avoid interest, you could still be hurting yourself with your credit card. Ideally, you should use no more than 20 percent of your credit limit. The amount you use versus your credit limit is called your utilization. Having a utilization of 20 percent or lower reflects well on your credit. A 30 percent utilization is still good, but 10 percent is the absolute best.
You can reduce your utilization by limiting your credit card use. Instead of using it for everything, only use it strategically. Or you can make several payments on your card throughout the month rather than paying one lump sum. Every time you use your card, pay it off with money from your checking account. This will help manage your utilization percentage.
Pay your bills on time. Though you may think paying your gas balance a few days late isn’t a big deal, even that small negligence can negatively impact your credit score. If you have a difficult time making payments when they’re due, consider setting up an automatic system with your bank. You can also set reminders for yourself with calendar alerts. When you plan your budget, make sure you take necessary payments out first. Make sure you have the money you need to cover your rent and bills before you make unnecessary purchases.
Check your credit score and credit report. If you don’t know your credit score and haven’t seen your credit report, it’s time to get informed. It’s hard to improve your score if you don’t know what it is or what is affecting it. Be sure that you request your credit report directly from one of the three credit reporting agencies — Experian, TransUnion or Equifax — or an organization authorized to provide credit reports like AnnualCreditReport.com, which is authorized by the federal government.
Clean up your credit report. See if you can strike bad reports from your record. This may include reports made by collection agencies or utility companies for late payments. Old information is typically removed from your report every seven years, but you can request removal between those periods. And if you spot any mistakes on your credit report, make sure to dispute those errors. For instance, a credit card showing the wrong credit limit could lower your score.
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How to Raise Your Credit Score to Get Approved for an Apartment originally appeared on usnews.com
