Rebuilding Credit with rental housing
If your credit is less than perfect and you’re interested in cleaning it up, you should be aware that it is possible. It may take some time to rebuild your credit, but there are many benefits to doing so. Here are just some of the benefits of having good credit
. Increased chances of credit card and loan approval – Just about everyone needs at least a couple of credit cards to use in emergency situations. You never know when you may be faced with an unexpected bill or repair. However, if your credit score is poor, getting approved for a credit card or loan might be difficult. Prospective lenders rely heavily on credit history, and if yours isn’t up to par, approval may be nearly impossible. Even if you are approved, your limit is likely to be quite low until you can prove you’re worthy.
. Better car insurance rates – Many consumers are unaware that car insurance rates are based on credit, but they are. This is another benefit of cleaning up your credit.
. Utility security deposits – Many utility companies require a security deposit if you’ve never had service with them in the past. However, you can avoid paying in some cases, if your credit is good.
. Renting – You may have experienced how difficult it can be to rent with bad credit, as landlords prefer tenants who have good credit, which helps ensure that the rent will be paid on-time each month. When your credit is good, you also have more negotiating power with landlords, since you will have more credibility.
While applying for a secured credit card or loan is a good way to rebuild credit, rebuilding credit with rental housing is another option. Experian is now including rental payments as part of their data. If your landlord doesn’t currently report to Experian, you can sign up to report payments yourself, which can significantly increase your chances of being approved for credit (especially a mortgage) after two years of on-time payments. It may be difficult to find a rental home or apartment with bad credit, but sometimes offering to pay a higher security deposit or several months rent in advance can convince a wary landlord to give you a chance.
When rebuilding your credit, it is important not to have any biases when it comes to which methods to use. This is because you will want use all available methods of rebuilding your credit, since every method helps in a different manner. If you take the time to work on it, your credit can and will improve over time, which can improve your self-esteem, in addition to many other things.