Improving Your Credit Score Ahead of Apartment Searching

featured posts, real estate  /   /  By junjieshi

Maybe you’re moving to a new city and searching for the perfect place for you and your dog Fluffy. Or maybe you’re sick of your closet being cramped and your bookshelves overstuffed and you just need more space. Maybe you are looking for better amenities. Whatever the reason you’re considering finding a new apartment, you might be worried about qualifying to rent the place of your dreams.

After all, you’ve heard that rental markets in some cities are red hot with few vacancies and considerable competition between prospective tenants. In those types of situations, any small thing that’s not in your favor on your rental application can keep you from sealing the deal and getting the keys to that great two bedroom or studio.

If you don’t have a great credit score, that can be a huge impediment to being approved as a tenant. That’s because many landlords will run your credit score before renting to you. Why? According to Nerd Wallet, a credit score is a good way for landlords to gauge your personal trustworthiness and your ability to make good on your financial obligations. If your credit report isn’t ideal, it could be because you’re already struggling with other debts or because you’ve struggled to pay things back in the past. That’s bad news for landlords who will worry that you’ll end up sending the rent late or not at all.

But if you have bad credit, it’s not the end of the world. There are a lot of things that you can do to improve your credit score before you go searching for a new apartment. Here are 4 things that will help you boost your score.

1. Look at your credit utilization

Your credit score is calculated based on a variety of factors. One of those factors, however, is your credit utilization. This is the percentage of the total available credit that you’re using on revolving credit products like credit cards or lines of credit.

To get an ideal score, you should keep your credit utilization between 20% to 30% of your available credit on each card and overall. If you currently have more debt that 20% to 30%, there are ways that you can mitigate its effect on your score.

The first thing you can do is pay off some of your debt. Don’t have a big chunk of money? No problem! You can also call your credit card company and see if you can increase your limit so that the percentage of your available credit used decreases.

Alternatively, LendEDU suggests that consumers take out a personal loan in order to refinance your debt. You can reduce your interest rate and also dramatically reduce your credit utilization at the same time. That’s a win/win situation!

2. Establish a better credit mix

Another thing that affects your credit score is the type of credit you’re using. The more different types of credit that you have, the better your score. You might therefore want to take out a department store credit card, a personal loan, or a line of credit if all you have are regular credit cards. By adding other credit types to your credit mix, you can boost your score.

3. Avoid Late Payments

One of the credit missteps that has the biggest impact on your credit is missing payments on credit cards, loans, mortgages, or student loans. Those lapses will stay on your credit history for 7 years and could temporarily tank your credit.

The good news is that most late or missed payments aren’t reported to credit bureaus unless they’re 30 days late. If you miss a payment, be sure to follow up to make sure that it’s not reported to the credit bureaus or to ask that they remove the report on compassionate grounds if you have a good reason. If you’re not good at remembering to make your payments on time, set up automatic payments so that you don’t need to think about it or put a reminder in your calendar.

4. Fix mistakes on your credit history

Not sure why your credit score is so low? Make sure to order your free credit report once a year and check it thoroughly to ensure there are no inaccuracies. Did you already get a free credit report this year, you should still look over your report before looking for an apartment even if you have to pay.

Mistakes on your report could have a significant impact on your credit score. If you find something that isn’t accurate, report the problem immediately and ask the credit bureaus to remove it from your report. You’ll have to do the same with each of the credit bureaus if they all have the error. They will have 30 days to decide whether or not to remove the item in question. Though the process is time consuming, it will be worthwhile if it means that you’ll be able to get the apartment of your dreams!

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