Every day, every hour, the talk about credit sores is all over the media. It has almost become impossible to live without a credit score these days. The sudden rise of the credit score to ‘stardom’ is as a result of many Americans’ dependence on credit in their lives.
Credit scores now rule our lives. The play a significant role in deciding what is going to happen in our lives. A credit report shows the record of your creditworthiness or financial history. It is a summary of our financial successes and failures. It helps lenders gauge the likelihood of default and our debt management skills.
Credit scores have become so important that when you want to rent a house, the prospective landlord want your credit report. Jeffrey Taylor, the Editor of Mr. Landlord warns prospective landlords, ‘before you rent to any applicant, be sure to have reviewed his or her credit history. If they can’t pay others it is a good bet they will not pay you.’
When you make a rental application, most landlords run credit checks on prospective tenants. If your credit score is below average then you are likely not to succeed in your application. If you have failed to pay other creditors or have filed for bankruptcy then prospective landlords will not want you in their premises. If it shows you always pay your bills then it also means you will pay rentals late.
When your credit score is not good you may end up paying more rent than you would pay with a good credit score. You may be asked to pay a very high security deposit. Other landlords will require the use of a co-signer who will be liable when you default. In some countries, you might be requested to pay annual rentals up front. The landlord will be trying to reduce his exposure in case you default.
Not every landlord requires credit reports. Apartment complexes that are owned by big companies will surely review your creditworthiness. When your credit record is not good and you are certain that they will review it, it is advisable to include an explanatory letter. You can explain your situation and what you have done to get out of the problem in that letter.
It is advisable to get your credit report every month. Getting your credit report does not hurt your score. Pay your bills on time, analyze the report and ask questions if you don’t understand anything. Credit reports might have wrong information which will hurt your credit score. Knowing how it works will make improving your score much easier. Plan your things – plan when you are going to do what. It will give you a lot of discipline.