Finding an apartment is supposed to be an exciting time, where you can finally find a space that’s your own, that you can feel safe and comfortable in and be proud of.
Renting an apartment is often a huge milestone in the lives of young people and others who are just now finding their independence and setting themselves up for a successful and prosperous life.
However, while looking at apartments can be fun and exciting, it can often be a stressful experience littered with problems, from poor quality apartments to low availability.
However there’s one issue in particular that can be particularly problematic and stressful for new renters, and that is ensuring that you have a high enough credit score.
Credit scores are a measurement of how eligible you are in the financial world, and is a sort of scale that’s used by various institutions from credit card companies to banks in determining how much of a risk you represent to these companies, should they go into business with you.
The frustrating thing is that for some people, credit scores are something that they will have been unaware of for most of their life, particularly if they are from a disadvantaged background, which can be even more difficult as these are exactly the people which credit scores penalize and punish, making already difficult decisions and processes even more difficult and stressful.
If you’ve never been told about credit scores and how they can affect your ability to rent or have questions about credit scores and what you can do to improve them so you can finally get your own place, this is the article for you.
Generally, when it comes to renting you need a ‘good’ credit score in order to be able to secure a lease on a property or convince a landlord you’re a good candidate.
While credit scores can vary depending on what reporting service you use, they will generally put you in roughly the same ballpark and will determine this based on a variety of factors from your employment situation to previous debts, credit history, missed payments, defaults, repossessions, and successful payments or completed debts.
It’s not an exact science by any means, but the repercussions can be huge and have very real consequences for your opportunities in life.
There are some occasions where you may be approved with poor credit or refused with good credit, and there are no concrete rules to these processes, however, there are certain ranges to be aware of. These are;
Poor Credit – 300 – 579
Fair Credit – 580 – 669
Good Credit – 670 – 739
Very Good – 740 – 799
Exceptional – 800 – 850
Typically, most landlords and rentals will require a minimum credit rating of 650, which would mean you have a fair to good credit score and are considered a relatively safe and reliable person with which to go into business, however, this can vary depending on the location, the apartment, the landlord and agency as well as market demands and how desirable renting is in a certain area.
There is a range of services available to get a credit score, however, some landlords will want to use their own service to be sure you meet their specifications so you may not be able to get an exact idea of whether you meet their requirements until you’ve taken the particular credit check they want you to take.
The most important thing to do if you have a low credit score is not to panic. Everyone has a different set of circumstances and there could be many good reasons that your credit score is low.
One of the most common reasons is that you’ve never borrowed before, or are seen as a sort of unknown by the credit industry due to a lack of activity and usage of credit.
These companies hate uncertainty and this is one of the very common reasons why people get low credit scores, however, there are many other reasons also.
If you do get a low score all may not be lost either.
The first thing to do is contact the agency or landlord and be honest about your situation. Explain things clearly and try to give them logical reasons why you may have a low score.
Sometimes this can put them at ease and give you a chance to still rent the property you want.
Another thing to do is be prepared, have all the information you need about your previous and current financial situation to hand, and ready to make things easier and to prove you’re organized and reliable
You can also offer to lay down a higher deposit if you’re able to, to give the landlord or agency as much certainty as possible about your reliability and viability as a potential renter.
Another thing to do is get references if you’ve been able to rent previously. Positive references make landlords much more likely to accept you if they can be convinced that you’re a reliable tenant and a trustworthy person.
Pay what you can as often as you can! – Paying down debts and meeting the minimum payments on outstanding loans can help build your credit score and prevent defaults which will lower your credit score dramatically.
Take out more credit! – Unbelievably, using more credit actually improves your credit score, as long as you manage it responsibly and use it correctly.
Don’t close old accounts! – For some reason, your credit score will tend to suffer when you close down old unused accounts. The older your accounts the better in terms of your credit score.
While there are sometimes rooms available which don’t require credit checks you should be cautious as these can sometimes be risky as they will often be poor quality and the landlords who operate them can be predatory as they know tenants will have few other options available and will be easy to control and manipulate.