Your credit score plays a significant role in helping you get approved to rent a house in Fort Collins. A good credit score will ensure that application doors stay open, while a bad credit score may force you to open a window. It is not impossible to rent a nice home with bad credit However, it can make things a little more challenging or even limit your options. Thankfully, there are tips for you to improve your credit score and rent a better home.
Why Is a Credit Score Important for Renting an Apartment?
Your credit score and credit report are an important factor of a rental application and typically a requirement to rent a house or apartment. The information behind both items provides property managers and landlords with key insight into your history of financial responsibility and helps them to determine if you would be a reliable choice for their property.
When a property manager does a credit check on an applicant, they gain access into their bill payment history including any patterns of late or missed payments. It also provides them with information on foreclosures, repossessions, credit card balances, and personal loans, all of which play a role in determining if you could be trusted with their home and investment.
Can You Rent a Home With Bad Credit?
Having bad credit won’t automatically disqualify you from finding a nice home, but it can create an obstacle. Property managers don’t expect for every applicant to have a perfect credit history, but they will expect an explanation as to why your credit score is low. Thankfully there are many ways to deal with bad credit when renting such as being honest, finding a co-signer, paying in advance, or bringing references.
Ways to Improve Your Credit Score
The best thing you can do to help you rent a house in Fort Collins or elsewhere is to take action toward improving your credit score. The higher your credit score is, the more likely it is that you will be approved for the home you want. According to what was said by Experian, a good credit score is one of 670 or higher. If your credit score falls below that mark, here are a few simple things you can do to help raise it.
1. Check That Your Credit Reports Are Accurate
It is possible for errors to appear on your credit report. If your credit score is lower than you think it should be, start by checking your credit report for unresolved errors, mistakes, or discrepancies. You can request credit reports from the three main credit reporting agencies, Experian, Equifax, and TransUnion. Check carefully for any incorrect information or items you don’t recognize and dispute those quickly.
2. Pay Bills On Time
Late or missed payments on rent, utilities, credit cards, loans, phone bills, and more can all have an impact on your credit score. Be careful to pay every bill on time. An easy way to make sure you don’t forget a payment is to opt for automatic withdrawal from your account. If you don’t feel comfortable with that, try setting a reminder in your phone.
3. Pay Down Your Debt
An important factor of your credit score is your credit utilization ratio. This is the amount of revolving credit you use divided by the amount of credit you have total. A higher credit utilization rate shows that you have used up a significant amount of your available credit and likely have higher monthly payments on your debt. The lower your credit utilization rate, the lower the amount of debt you have and the more of your income is available for on-time rent payments.
4. Keep Credit Card Balances Low
If your low credit score wasn’t caused by higher debt amounts, you should be careful to keep the balances on any open credit card low. Keeping balances low will ensure that your credit score isn’t affected by a high credit utilization rate.
5. Open New Credit Card Accounts Wisely
If you have no credit, getting a credit card can help you build up your credit history. Low balances that are paid off on time every month can help to improve your credit score, but be careful that you don’t abuse new credit accounts. If you struggle to manage credit cards wisely or have a bad credit score already, avoid applying for new credit cards of any kind. Applying for a credit card will create an inquiry on your credit report that could hurt your score rather than help it.
6. Don’t Close Unused Or Paid Off Credit Cards
Don’t celebrate your last credit card payment by calling to cancel the card. Keeping unused or paid off accounts open can actually help to improve your credit utilization ratio by showing a lower amount of debt compared to your total amount of available credit.