Credit screening plays a role in many major investments, whether it be a new home or a new automobile. When landlords and property managers are choosing between potential renters, credit score is almost always a factor. When you’re buying a car or home, a few points’ difference in a credit score can translate to thousands of dollars difference in price. When you’re renting, it can spell the difference between being chosen to rent the property or not.
Want advice on how to improve your credit score? Here are 4 things you can do to up your score and increase your chances of securing the property you’re interested in renting:
Check for Accuracy
Obtain a copy of your current credit score report and check it carefully for any errors. Wrong information may include accounts that aren’t yours, late payments you actually paid on time, debts still listed that you already paid off, etc. Taking the time to correct these errors can have a positive impact on your credit score — and, in some cases, help you detect fraud or identity theft.
Pay it Off
This one is obvious and straightforward: improve your credit score by paying off your credit and getting out of debt. At the very least, pay the minimum balances required on each of your credit accounts. Outstanding balances will reflect poorly on your credit score and certainly have a negative impact on your rental application. If you have one account with a debt much larger than other accounts, consider transferring funds between accounts to even things out. Shifting credit to eliminate any grossly overdue accounts can positively affect your credit score.
Pay it Quickly
The easiest thing you can do to improve your credit score is to pay your bills on time. If you habitually forget to make payments, consider setting up automatic monthly payments so you don’t have to remember to manually make a payment every month. Whatever works to keep it from slipping your mind, do it — late payments are terrible for your credit score.
Actually Use Your Credit
This advice comes with a few caveats — when it comes down to it, you should aim to only use credit when you absolutely need to. Using cash for most day-to-day purchases will help you avoid the mess of debt altogether. However, you can’t have a good credit score if you never use credit — in fact, you won’t have a credit score at all. If you’re wary of obtaining a credit card, pick something small and consistent — such as putting gas in your car — that you can buy on credit. Then, easily and quickly pay it off and you’re good to go. And when you get a credit card, choose a major credit card company — the type of credit plays a role in determining your credit score, and having a Visa or American Express account will look better than a no-name card from a random retail establishment.
What it all comes down to is responsibility — be responsible with your credit management, and property management companies won’t feel compelled to turn down your rental applications.