4 Most Effective Ways to Improve Credit Score if You’re Looking to Rent

A padlock in front of a credit card.

4 Most Effective Ways to Improve Credit Score if You’re Looking to Rent

Renting has become a common path for younger professionals and millennials, with over 34% of the US population renting, and over 1/3 of those renters just below 35 years old.

And the numbers make sense! At this age, your main concern is to start a life of independence, and what better way to start than move out and get your own place?

Unfortunately, true adulting also comes with a need to build a solid financial reputation. You’re assigned a credit score when you turn 18 and get your first personal credit card or student loan. A credit score dictates how creditworthy or trustworthy a person is when meeting financial obligations.

A good credit score is an important consideration for potential lenders. Landlords typically require a minimum score of 620. Thankfully, there are ways to increase your score which you don’t already realize you do, such as payments on your credit card, your car mortgage, and yes, even monthly rent.

If you’re looking to rent again, here are ways to beef up your credit score.

Know Your Credit Score

If you’re looking to rent, get ahead of potential negative checks by requesting your credit reports from the nationwide credit bureaus via Annual Report. If you have a clean record, keep this on file and make sure you’re able to track it yearly. If you see anything erroneous, contact the relevant bureau.

If the errors pertain to moments in your life that need some explaining, i.e. momentary financial hardship during the pandemic and similar reasons. Be open with your future landlord in your application. Although credit checks can be a great deal of information for them, you can always appeal this and provide context.

Use Your Credit Card Wisely

If you have a personal credit card, payments you make on there are direct inputs to your credit score and can be a great way to show creditworthiness. If you already budget for regular payments such as your car mortgage, your student loan, and even utilities, get these on the record by paying with your credit card.

Always pay your credit card balance in full or at the very least keep your outstanding balance to 30% or less. Set automatic bills payment on your phone or make calendar reminders on your phone or laptop to keep track of all your obligations—you won’t regret it.

If you can’t get your balance down to 30%, try asking your credit card company for an increase on your limit. That will make your balance a lower percentage of your higher limit—just don’t spend your way to a higher balance!

Ask For Your Rental History To Be Recorded

If this is your second or third or tenth move, chances are you are already an excellent tenant. But if none of your previous landlords can verify this properly without you nagging them about it, that’s a valuable track record gone to waste.

If you live in a large apartment complex that manages multiple tenants, ask your landlord if they record rental history via processing platforms such as Esusu, RentTrack, and Cozy. These platforms can automatically pass on your data to the credit bureaus that calculate your score.

If your landlord doesn’t have this (or they completely ignore your calls and messages), you can take matters into your own hands by subscribing to free or paid rental reporting platforms such as Rent Report, Rental Kharma, and Zingo. If you’ve been a good tenant in the past (and you should be), rental data is an excellent way to let future landlords know you can pay on time and in full.

Get A Cosigner Or Co-maker

If it’s your first time to rent or if you have no existing credit history, get someone to cosign on the apartment lease. If a parent, an older sibling, or a family member has established good credit, it will help you tremendously to piggyback on their credit.

A cosigner’s job is to guarantee your payment in case of delinquency. Although you don’t intend to default on your payments, having a cosigner will give your landlord some initial comfort. Having a cosigner also shields you from any potential hits on your credit score in the off-chance you miss rent.

Get That Life-Changing Credit Score ASAP

At the end of the day, a landlord will look at you the same way a credit bureau will. Will you make your payments on time? Will you make your payments in full? How much do you owe and do you own up to it?

Although creditworthiness cannot be proved overnight, there are ways you can get your credit score to a comfortable level—enough to give you more rental opportunities in a neighborhood of your choice.

Do you want to learn how to renovate your rental without losing your security deposit? Read our blog to find out how you can do it.

Are you looking into moving to the City of Detroit? Contact us at Logical Property Management. We’ll help you find your dream home in your ideal neighborhood.

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