Your credit score and housing

Planning to Rent a House or Apartment? Check Your Credit Report First

Your credit score can affect your life in ways you may not have considered. Beyond its impact on your ability to get a loan or a mortgage, your credit score can be a determining factor in renting a house or apartment. Whereas landlords used to rely on their instincts when deciding whether or not to rent to you, online tenant screening programs have now made it easy and affordable to conduct tenant background checks that generally include a credit report. Primarily they are looking for negative entries that show you may not be a responsible tenant in terms of keeping up with monthly payments, such as rent. They will also check to ensure that the name, current address and employer listed on your rental application match what is on your credit report.

If you want to make a good impression on a potential landlord, you should start by getting your credit report in order.If your credit score is within a landlord’s standards, there’s a good chance your rental application will be accepted. However, a lower score might be considered a reason to deny your application or require you to pay higher rent. You may also have to put down a larger deposit or even use a guarantor (usually a homeowner with a mortgage) who guarantees to pay the rent if you fail to do so.

Your rights under the Fair Credit Reporting Act

While federal laws allow landlords to use your credit report in deciding whether you will make a good tenant, you have rights too. Most importantly you have the right to receive a copy of your credit report and dispute any errors you find. You can also add a summary explanation to your report if your dispute is not resolved to your satisfaction.

A landlord must have your permission to request your credit report in the first place. In the event your application is denied based on information from your credit report, the landlord must provide you with the name and address of the credit bureau(s) they contacted.

Recommendations to help improve your credit score

  • Pay your bills on time, beginning right now. No matter what your situation is, this is the best way to get started. You will show good faith by making regular payments to improve your credit history.
  • Dispute damaging claims. Consumer advocates and financial advisors encourage consumers to actively correct errors on their credit reports by contacting the credit bureaus as well as the entity that provided the erroneous information.
  • Work with creditors. If you have a late payment on an account for which you have a history of on-time payments, try contacting the company to see if it can be erased from your credit report.

There are many consumer credit counseling services that can help you gain control of your finances and get you on the right track toward good credit. Some credit counseling services are non-profits whose sole purpose is to help consumers gain good financial status. Make sure to check the credentials of any service you decide to use, as there are fraudulent companies that can only make your situation worse.

Home rental is one of many aspects of your life that can suffer from a low credit score. If you’re planning to rent a house or apartment, you need every advantage you can find. It’s well worth the effort to begin building a good credit report and make yourself a more attractive renter.

 

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