Did you know your credit score can either help or prevent you from securing that perfect apartment? It can, but don’t worry, we’ve got all the information you need to understand why your credit score is so important.
Credit scores are designed to represent your credit risk. This numerical number, ranging from 300 to 900, is determined by your actions. Your bill and credit card payments, any new or existing personal loans, car loans, or lines of credit affect your credit score. Paying bills on time and always making required payments on loans will raise your score, but late or missing payments will lower your score.
A good credit rating is any number between 750 and 900, an average score are numbers between 600 and 750, and numbers below 600 represent bad credit. It can be beneficial to review your credit report and check for errors. Your financial institution can preform a credit check for you, or you can receive a free personalized credit score report online from Credit Karma. Look for open credit or loans that should be closed, credit cards you don’t remember signing up for, or miss information about your balances.
If you discover a poor credit score, you can improve it. Start by paying all your bills on time and pay at least minimum requirements on all credit cards. To tackle different types of debt, focus more money on high-interest credit cards and pay at least the minimum on everything else. When spending, don’t solely use your debit card. While this will avoid interest payments, it doesn’t get tracked in your credit score. Having one credit card to use periodically, will boost your score over time. Also, keeping your credit use below 30% of the limit will positively affect your score.
Landlords often run credit checks when potential tenants apply for a lease. Your landlord is looking at your credit risk to assess whether you’ll be able to pay your rent on time and will judge from your score how likely you’ll maintain punctual payments. Having an average to good credit score will show the landlord you can be trusted financially and support an approval of your lease agreement.