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When Renting, Make Sure You're Creditable


By Relocation.com Staff

You might think that because you're renting and not buying that you're free of all those hoops that homebuyers must jump through. True, but there's one hoop you probably will face: the credit check.

In order to make sure you're good for your monthly rental check, many landlords will insist on a credit check, and if you're not up to snuff, you probably won't get the apartment. So it's a good idea you understand your credit report before you even start looking for an apartment, so you don't waste any time later if your credit report is a bit spotty.  

Ask yourself the following questions to determine if a potential landlord might deem you a risky renter:
• If you have a current mortgage: Have you let payments go past due by date without paying?
• Revolving credit - You should have no payments more than 60 days past the due date and very few more than 30 days past due date.
• Installment credit - You should have no payments more than 60 days past the due date and very few more than 30 days past due date.

Credit reporting agencies can even tell if you are paying your taxes on time or if there is a court judgment against you.

Companies with whom you do business send credit information about you weekly, monthly or quarterly to credit reporting agencies to update their systems.

You can find out how you rank by ordering a credit report for yourself. Fees vary from free to $12, although getting it free can often be a struggle with the many firms that offer to give it to you free -- prepare yourself for the biggest upsell of your life.

The good news is that your lender gets the same information that you do so there will be no surprises.

There are basically three major national credit companies from which you can obtain your credit report. You may be able to do this by phone. If you do so in writing, be sure to include your name, address, Social Security Number and you may also need to include a copy of your driver's license. Check their Web site.

Experian
P.O Box 2104
Allen, Texas75013-3742
1-888-397-3742

Trans Union
P.O Box 390
Springfield, PA 19064-390
1-800-888-4213

Equifax
P.O Box 105873
Atlanta, GA 30348
1-800-685-1111

What's FICO?
The most important figure is the FICO number, which is basically your credit rating. The scale for rating goes from 300 to 800, with 800 a perfect score. Scores higher than 650-660 are considered good, but anything below this will need some explanation. If your score is over 700, you have a good shot of being approved.

If your score is under 600 you will most likely have difficulty in securing financing and, if you do, you will probably be penalized with a higher interest rate because you are deemed a risk.

There can be several reasons your rating is low. Your revolving credit or mortgage payment may be consistently late or you may have defaulted on a car or other loan in the past. You may not have paid off your medical bills on time. Surprisingly enough, if you have obtained very little credit in you life, you may also have a low rating because there is very little history, so the lender must assume the worst case.

Correcting Mistakes on your Credit Report
If your score has been unfairly calculated based on incorrect information or any issue that has already been resolved, you will need to bring this to the credit agencies' attention. You will need to obtain a letter from the originator such as a store stating the issue has been resolved.

In case there was an error on the store's part, you will need to get the store to write a letter of explanation that you can provide to the credit agencies. If the error is with the credit agencies, such as an incorrect name, you will have to clear it with them. Following this, your FICO score will need to be recalculated and you can request a credit report to check that the issue has been resolved.



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