So it’s time to move. Time to find a new place to call home. Whether this will be your first apartment or simply time for a change, one simple truth remains the same – your credit score is going to affect your application process for getting into the new place. And if your score is too low, you may not even qualify at all. Worry not, however, because in this article we’ll give you some tips on getting your credit back on track.
Fixing Your Credit So You Can Get an Apartment
Keep in mind that fixing your credit takes time and patience; it isn’t something that is going to happen overnight. So it’s best to implement these practices several months ahead of time. If hearing that bums you out, then know that there are some things you can do today– even right now– to start the journey toward fixing your credit score. If you’re ready to make a true change and start building the future you’ve always wanted, use one of our excellent, trusted programs.
Now, in addition to that, let’s take a look at what you can do to fix your credit before you start apartment hunting.
1: What is Your Current Credit Score?
You need to understand where you are starting this journey to credit recovery, and the only way to do that is to determine what your credit score currently is. There are three major credit reporting bureaus – Equifax, Experian, and TransUnion. By law, you are entitled to a free report, once per year, from each one of these three companies. It is highly recommended that you take advantage of this.
Your financial data is reported to any number of these and is then correlated and stored for future lenders and creditors to be able to check. When your credit is run, a credit scoring company puts your data through an algorithm and a number is generated. The two largest companies that offer this service to lenders, creditors, and others who need to check credit are FICO and VantageScore.
A lot of things factor into making up this score, and the algorithms used by these companies assign slightly different values to them. However, this list is arranged in order from the most damaging to the least damaging.
- Loan default
- Court judgments
- Past due payments
- Late payments
- Credit rejections
- Credit inquiries
2. File Disputes for Any False Information
Once you get the copies of your report, look them over carefully. For each credit bureau that you discover any incorrect accounts with, you will file a 609 Dispute Letter and include any proof that you may have to counter the information found in the report. When such a claim is filed, that bureau must perform an investigation and, if found to be in error, they must correct or remove that item from your report. It could take a month or more for them to process your claim, but this could potentially have a big impact on your overall score.
If you see a credit account that you don’t recognize at all, it could be a sign of identity theft and you should report them to the Federal Trade Commission immediately.
3. Pay Off Your Debts
When the budget is tight, it can be difficult to spend money on things that don’t seem to immediately need your attention – such as debt. But the harsh truth is that outstanding debt weighs heavily on a credit score and you are better off clearing it as soon as you reasonably can. It may take time to do so, but once it has been worked down, you can begin to lay a healthier foundation for your financial future.
You might consider hiring a debt consolidation service, which would put all of your bills into a single loan that you then pay against. But these can often come with a high interest rate, so you need to carefully consider the contract before you sign up. Also, if possible, keep any credit cards that you have open and unconsolidated with the rest if you take this route. The age of the credit accounts you carry can help your credit score. If spending on these cards is part of the issue, shred or hide the physical card itself to prevent you from using it. Some people have even frozen them in ice and kept them in their freezers.
4. Adopt Healthy Financial Habits
It is best to be honest about how past mistakes might have damaged your credit in the past. Growing beyond those mistakes and adopting better practices regarding your finances is the only way to fix your credit.
It breaks down into three basic tenets – pay your bills on time, keep your balances low, and don’t borrow more than you can pay back.
5. Build New Credit
When you are able to get your credit back to a more stable place, now you can start building a stronger foundation for your future. Your efforts will take time to bear fruit, but trust that your patience and determination will pay off.
Moving into a new apartment can be an exciting time in your life, and it should be! Follow these tips to make sure that this new chapter of your life starts off with the best foundation that it can.