Sunday, July 08, 2012

8 Credit Tips for Renters

According to Zillow, since May 2011 rents rose 14% in San Francisco and rose 11% San Jose, California. Last year in Minneapolis, rents rose 11% even though home values dropped 8%.  According to John Burns Real Estate Consulting, it is now cheaper to buy a home than it is to rent in virtually every major city in the United States.

Unfortunately, many renters still have bad credit from the effects of the 2008 recession and are still struggling to make ends meet.  Lenders are getting stricter with requirements for mortgage approvals leaving some renters paying higher rent than some homeowners pay for a mortgage.  Landlords generally use three main factors when approving renters: credit score, income and employment history.  If you are a renter and looking to become a homeowner, here are 8 tips to help increase your credit score:

  1. Know before you show. Get a copy of your credit report. Verify all information and look for errors.
  2. Fix any errors. Dispute online or in writing.
  3. Pay down debt. Pay late accounts first such as:  collection accounts, judgments, liens and repossessions.
  4. Cut back. Stop spending and pay with cash.
  5. Stay still. Don’t open any new accounts.
  6. Pay more. Put down a large security deposit.  Be willing to pay 2 months’ rent upfront.
  7. Automate. Agree to setup automatic monthly payments.
  8. Provide evidence. Show your previous payment history.  Print out payment receipts for rent for the last two years.
 Provide references.  Bring references from your landlord; character references from your pastor, friends, and supervisor; bring your resume, awards you’ve won, community service activities, career plan (mapped out with your supervisor).  

Remember, there is always someone with a higher credit score, that makes more money and has a better profile than you. Be honest about your financial situation and your credit.  The company does know you; just your credit score and you are a risk until you can prove otherwise.


Maggie Lykins said...

Your articles make complete sense out of each topic.
3 credit score

Arshad abas said...

Its a very useful information. There are many bad credit expert in the market but this topic will be helpful for those having bad credit rating.