What Credit Score Is Needed For Renting Your Own Place ?
You’re getting your own place. Letting your independence shine.
Town chosen, perfect number of rooms, views your old neighbours will be jealous of and the decor picked out feng shui style. But the bubble can soon pop in a waterfall of satin twilight dreams if your credit score lets you down.
Oh no no no, I hear you say, I have been a savvy money saver and will have no problems renting or getting a mortgage. Maybe you have been, but there are often small things most of us don’t think about that could actually be harming our Credit Score more than you think.
If you’re looking to rent you might think that your credit score doesn’t have the same impact as if you are looking to buy, and yes, you’re correct, it doesn’t need to be as high as if you are looking to get a mortgage.
But, answer me this, are you thinking that in a few years time you might like to move on and have your own house? If so, renting can be the very important building blocks towards that dream.
USE YOUR RENTAL PAYMENTS TO IMPROVE YOUR CREDIT SCORE
Making sure you are an A-star tenant can be detrimental for your future plans.
Even if right now you can’t think beyond the next two weeks because let’s face it, Christmas and New Year are a pretty big deal right, but would it hurt to step away from the box of celebrations for 5 minutes to check you’re doing what you can so that Christmas 2017 or beyond, might be the year you really get what you want.
After all, having a good Credit Score can help you in renting a property and if your monthly payments are correctly reported it can help boost your Credit Score, so double check your landlord is providing this information to the Rental Exchange Scheme.
But remember, this can work in both ways, if you are paying your rent on time great, if you have been late or missed payments the report can have the opposite effect on your score.
Think landlords only Credit Check a small proportion of applicants?
A huge 68% of landlords now take your Credit Score into account when looking for tenants and 62% agreed it was, the most important thing they need to make a decision.
With nearly half of these landlords now doing a credit check on all potential tenants it doesn’t leave you much room to slip through without being checked.
MISSED PAYMENTS ?
You’ve only missed a few payments, and a couple times they were late, but you made up for it and paid a bit extra the next month so that’s ok. It’s a common thought but something as simple as late payments can have a huge affect on your Credit Score.
Whether it’s a credit card bill, a store card you’ve been a bit Christmas happy on, or maybe you are already renting and want to move somewhere bigger, those forgotten payments can add up.
You probably don’t know your next landlord and there’s a strong chance they won’t be your best buddy of 20 years, so unfortunately they don’t know anything about you either.
A forgotten or late can seem irresponsible to a landlord who only knows that you’ll pay them on time by looking at your Credit Score.
Don’t mistake this for you being judged as a person though. Circumstances out of your control may have left you with a poor credit score even when you have tried to do everything right.
Maybe you have a low score because you don’t have payments to make, you buy when you have the money and if you don’t, you wait for it.
Either way don’t be disheartened if you are turned down to start with, landlords don’t have the time to sit with you for the story of your life, most will take the evidence that tells them whether you will be able to pay the rent on time or not.
So although it would be nice for them to take you on because of all the good you do, make sure some of that good is keeping your Credit Score in check.
Don’t hide from it! Take control.
USEFUL LINKS :
Credit Ladder – Sign up to Credit Ladder and have your monthly rental payments recorded by the credit agencies and build your score.
Rental Exchange Scheme – Created by Experian and the Big Issue Invest. The Rental Exchange was developed to tackle the financial, digital and social exclusion challenges faced by rental tenants in the UK compared to homeowners. By observing rental payment data in the same way we view mortgage payment data, we can unlock a range of benefits for tenants, housing providers and credit providers. The Rental Exchange incorporates a tenant’s payment history in their credit file in a secure and compliant way, with no cost to either the housing provider or tenant.