Average credit score for rental housing has risen: how to build a good financial history
You may have heard that the higher your credit rating, the more financial flexibility you will have. Having a solid rating increases the likelihood that you will get approved for a new credit card, car loan or mortgage. And if you are looking to rent a home, not buy it, an impressive credit history can be your admission ticket. What you should pay attention to if you plan to rent a house, the publication said. Fox Business.
The average credit rating required to rent an apartment is constantly growing. Over the past three years, it has increased by one point per year. And when looking at over 5 million rental applications, the average US tenant credit rating was 638 in 2020.
Unsurprisingly, tenants in higher tier buildings tended to have better creditworthiness with an average score of 669. On the other hand, tenants in low tier buildings had an average score of 597.
What can you do to improve your credit rating?
1. Pay all bills on time
Payment history is the most important factor in calculating your credit rating. It tells you how well you pay your bills on time. If you want your score to increase, don't be late with your bills - it's easy. For the most part, this also means paying all your bills in full, although there are exceptions. For example, let's say you send a minimum credit card payment every month on a due date. You will be considered a timely payer even if you carry over the remainder of your debt.
2. Pay off your existing credit card debt
Easier said than done, but if you can reduce your existing credit card balance, it can really do wonders for your credit score. The less outstanding credit card debt you have, the lower your loan utilization rate will be. It is a metric that calculates your existing debt in relation to the total available loan.
On the subject: 7 unexpected mistakes that can lower your credit rating
A ratio of 30% or lower will improve your credit score, so look at how much credit you have and compare it to what you owe. Perhaps your total spending limit on all of your credit cards is $ 10 and your balance is $ 000. In this case, paying $ 3 will cause your utilization rate to drop.
3. Check your credit report for errors
Sometimes mistakes happen in credit reports. If one of your accounts has one of these, then it works against you. But your credit score can go up if you fix it. It even happens that one credit bureau has marked you with overdue debts that you never had. Or, your credit report is still showing a debt that you paid off long ago. Request a copy of your report from each bureau - Experian, Equifax and TransUnion - and see what's going on. You may need to contact one or more bureaus to correct errors, but it will be worth it as your score will improve when these issues are resolved.
You may be interested in: top New York news, stories of our immigrants and helpful tips about life in the Big Apple - read it all on ForumDaily New York
When it comes to renting a home, there really is no such thing as a minimum credit rating. Each homeowner ultimately decides which credit rating is comfortable for them. But the higher you have it, the more likely you will get a positive result. So if your credit rating needs an upgrade, get to work before it's time to sign a new lease.
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