Your credit score determines many things in your life. Lenders look at it when you buy a car with a payment plan, need loans for school, a home, or personal reasons, or want insurance. It’s a reflection of your financial history.
A bad credit score can make some things in life difficult. It can be harder to be approved for borrowing money, you’ll have higher interest rates, which creates more debt, and it makes renting an apartment challenging.
A credit score calculates a few factors, including; payment history, credit utilization ratio, length of credit history, and any new credit. The most substantial factors are your history and your credit utilization ratio, making up about 65% of your score.
Bad credit is usually anything under a 580 on the typical 300 to 850 scale. However, between 580 and 669 is considered a fair score, making it difficult for you to get approved in this range as well.
You can improve your score the most by always paying at least the minimum on time every month and trying to lower how much total debt you have. This means when you make a payment, you shouldn’t go out and use your card with your new available credit.
Even if you have had a bad credit score for a while, you can always improve it little by little. This will help you in the future when you’re ready to buy your first home.
A real estate agent isn’t just for houses; you can use one when looking to rent an apartment.
They can help you by negotiating the best deal on your behalf, state the experts at UMoveFree.
The agent will help you any way they can. Sometimes, a real estate agent will have the inside scoop on which apartment buildings refrain from checking credit score for approval. This might limit you to where you can live, but it will be better than being unable to rent an apartment altogether.
Maybe your credit score doesn’t reflect who you are today. Possibly, as a young adult, you raked up a lot of credit card debt and weren’t the best at making payments without realizing the future repercussions.
Now, you’re more mature and have a better hold on your finances. If you have any references, such as your current landlord, your bank, or an employer, they can write a letter. These are all worthy sources to explain your credibility.
When your new landlord knows you make more than enough money to pay rent every month, they’ll be more likely to accept. If the landlord questions your credit history, you can show them your last three months’ paychecks.
It will prove that you can afford the payments, and getting your rent in on time shouldn’t be a problem.
If the new landlord is still wary about you being a tenant with your credit score, you can ask if you can have a co-signer. These individuals are those who have a better financial history than you and the numbers to prove it.
This person should understand that if you’re unable to pay your rent or are evicted, they’ll take legal responsibility. This should be a family member or a very close friend.
Remember to be honest with them if you need to borrow money for rent and only choose apartments you can afford. You don’t want to be the cause of affecting their credit score or creating legal problems.
Most rental properties require a security deposit for any damages or problems while staying in their apartment. A typical amount is one to two months’ rent. You have to pay this all up front before you move in.
However, when you have bad credit, you might have to pay even more. This is so if you can’t pay rent one month, they can use your deposit to cover the funds.
You need to start creating a plan on how to improve your credit for the future. If you have a schedule and goal you want to reach, it’ll be easier to stick with it.
Have a monthly budget for all things including, rent, credit payments, gas, car payments, phone, food, and more. This will keep you on track to getting a better score. You can then explain to your new landlord the ways you’re getting your credit score under control.
Having a bad score can make it challenging to do many things in life, including renting an apartment. Your score might not reflect your financial status now, either.
To help you get approved for an apartment, you should work with a real estate agent, get a recommendation, show your income, have a cosigner, be prepared to pay more as a security deposit, and plan to improve your credit.