Are you looking to move but don’t have good credit? Do not panic, there are ways to better your score to be able to move into that sweet new spot. Landlords look at credit scores when considering possible tenants. Sometimes, credit scores are the deciding factor for who gets to rent the apartment unit. Learn about how you can better your credit score and slide into the groovy new apartment you have been dreaming of.
How Are Credit Scores Calculated?
In order to better your credit score, you have to understand how the credit score functions. A credit score is a numerical portrayal of how dependable you are at paying back borrowed money. There are multiple variables with credit scores, such as how long you have had credit, your payment history, and the amount of credit you use against the amount of credit you have available. The amount of new credit you build as well as what types of credit you have are important factors adding to your credit score, too.
Pay Bills Promptly
Thirty-five percent of your total credit score is made up of your payment history, which is simply paying your bills on time. Paying your bills on time will keep your credit score higher as you are proving that you have the ability to pay the money you owe when the time comes. If you borrow five dollars from your friend, and you are able to pay them back the next day, your friend will deem you credible since you were able to pay them back promptly. If your friend has to give you multiple reminders over the course of a few weeks in order for you to reimburse the five dollars you borrowed, they will deem you as uncredible as you were not able to pay back the money you owe when the time came.
Do Not Let Your Debt Accumulate
Your amount of debt compared to your amount of available credit is called your credit utilization. For example, if you have $200 in credit card debt and a $1,000 credit card limit, you have twenty percent credit utilization. It is encouraged to use ten percent of your total credit. You do not want to utilize more credit than you can pay when the bill comes, as this will lower your credit score. By utilizing ten percent of your available credit, you will be able to pay your bill on time, making your credit score increase. Additionally, by paying off your debt, you will lower your credit utilization and make your credit score a little better.
Make Yourself an Authorized User on a Responsible Credit Card
If you have a responsible family member or close friend with good credit that you can trust, you should look into being added to their credit card as an authorized user. Being an authorized user allows you to help build your credit with someone else’s card. If you do not have a credit card or are not eligible to get a credit card due to a lack of credit history, this is a good starting option as the cardholder will prevent you from spending unwisely, as you affect their score, too. The cardholder will be able to instruct and guide you on how they use their credit, and hopefully, in the future, you will be able to have a credit card of your own starting with a high credit score.
Open a Secured Card
If you have a low credit score (often below 600), look into a secured credit card to help you increase your score. A secured credit card will use cash collateral upfront as the credit line. It is imperative to know your secured card issuer reports to all three major credit bureaus to give you a correct credit score.
Rental Payments Are Included in Your Credit Score
If you plan to occupy your current apartment for some time, ask your landlord to report your on-time rent payments to credit agencies. While your landlord is the best option, there are many ways to go about reporting your on-time rent payments. If you desperately need your on-time rent payments report, you can pay to use a rent reporting service, however, you should still ask your landlord to report for you, first.