If you are thinking of renting a home but you do not have a great credit score, it is still very much a possibility for you to rent! Unfortunately, changing a poor credit score is not a quick fix, but with some time and effort, you can raise it substantially. Here are a few tips to improve your credit score so you can become a viable renting candidate.
1) Know Your Score
This one may seem obvious, but many people do not think to check their credit score until they absolutely must. In fact, it is smart to check your credit score at least once a month. This prevents surprises if there are any major changes, and helps you catch any errors that need to be addressed or corrected. There are many incredible options online options that allow you to check but no matter what service you use, it is extremely important to be aware of your credit score and monitor it on a monthly basis.
2) Manage Your Payments
This step requires some preparedness in planning. If you can manage your credit card payments and loan payments to show that you are reliable and can reduce your balances so that you have only a small amount left to pay, your credit score will be in a better place when you are ready to rent. Also, where possible, use auto-pay for your credit cards and loans so that you do not have to worry about missing any payments. This strategy works best when you have at least a few months ahead of your moving date to plan, but it is wise to plan your payments so that they can show good repayment habits anytime your score is needed.
3) Improve Your Payment History
Because your past payments contribute 35% of your FICO score, it is essential that–if your weakness has been late payments–you make sure to be consistent with repayments, and pay above the minimum whenever possible. Though this will not cause an immediate large change to your credit score, it is one of the best and most certain ways to steadily improve your score.
Also, when you are ready to explore renting options, you might want to consider renting directly from a private landlord who does not work for a leasing company, because that may allow you to explain face-to-face why you have a lower credit score and how you have been working to improve the score, especially if your moving time frame is limited and you do not have a few months to work on rebuilding your credit score.
4) Make Sure Your Records Are Correct
The final tip to improve your credit score is to make sure you have done everything you can to have your credit records correct and in order before you begin home-hunting. If you have had a recent credit increase, make sure your credit report reflects that change. If you have any disputes about your credit, reach out to and negotiate with the collector and see if the problem can be solved or if any amount can be waived. Lastly, be aware of the fact that stopping the use of a credit card can negatively impact your score. You do want to utilize your credit cards, but use them for smaller amounts that you know you can pay off – this consistency is ultimately the most important aspect of increasing your credit score. You can also pay rent using a credit card from services like PayRent. This consistent use can improve your credit score if you pay it off each month
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Dave is a seasoned real estate investor with over 12 years of experience in the industry. Specializing in single-family residential real estate, David’s strategic approach combines market analysis, financial acumen, and a deep understanding of urban development trends to maximize investment returns.
