Landlords need to make sure their tenants are creditworthy. If your total is too low, you may fail to get the best apartment. Few borrowers understand how influential this indicator is. But what scores do landlords expect?
In the US, the most common scoring systems are FICO and VantageScore. Both have a scale from 300 to 850. Generally, anything less than 620 makes renting complicated, as landlords question your ability to make payments on time. Fortunately, according to Credit Repair Partner, the scores are not always fair, and you may fix them in a few months.
Why Scores Fall
Derogatories on credit reports cause the indicator to drop. These are negative events like missed payments or defaults. Most damaging items stay on the records for 7 years, and some types of bankruptcies influence your status for a decade. For FICO, the history of payments is the most influential factor, as it accounts for 35% of your score. Missing a payment is more consequential than you may think.
On the upside, the details underlying the score may be false. It is estimated that 20% of consumers in the United States have mistakes on their credit reports. These documents are provided by three major agencies — Equifax, Experian, and TransUnion. Any wrong derogatories may be formerly disputed and removed by following a strict procedure. You may get help with credit from repair experts. Fixing it by yourself is possible but complicated.
How to Improve Your Total
First, you need to establish whether your records are accurate. Every US citizen is entitled to a free copy of their report from each of the agencies once a year. During the pandemic, the service is now accessible weekly via www.annualcreditreport.com. Submit your request to download all three reports. This is the fastest way to obtain the data.
Next, you should scrutinize the documents to identify any mistakes. If the derogatories are true, the repair is not an option. Your score has fallen due to your own reckless behavior. When there is a history of late or missed payments, restoration could take years.
From now on, you should never miss another payment. Set reminders if you tend to forget. In addition, you may increase the total by adjusting utilization or adding more data to the records. Find out more below.
1. Reducing Credit Utilization
This percentage shows how much of the accessible limit has been used. It only applies to credit cards. For example, if you have two cards and their combined limit is $10,000, while the combined balance is $5,000, you are using 50% of the available amount. This is a terrible rate. According to different sources, it should definitely be below 30% — ideally, under 10%.
There are several ways to reduce utilization. First, you may pay off most or all of your balance. Secondly, you may increase the size of accessible credit. For example, you may ask the bank to extend the limit or apply for a new card. Keep the balances as low as possible. If you do not qualify for a regular card, get a secured one, which requires a deposit.
2. Limiting Hard Inquiries
These entries appear when you apply for a new loan and the lender checks your borrowing history. Frequent hard inquiries are bad for the score — they affect 10% of the FICO total. You may need to postpone applying for new loans or credit cards. On the upside, inquiries for the same forms of credit (for example, mortgage) between 14 and 45 days may be regarded as one entry.
3. Adding More Information
The online Experian Boost service may help you add up to 12 points to the score. This is done by including utility bills and other recurring payments. Even your Netflix subscription may be added to your report from the agency.
Overview of Repair
When reports contain mistakes, these may be removed through formal disputes. A repair company will collect your records and analyze them to find the most damaging items. Next, it will collect evidence to prove that the derogatories are false. Finally, dispute letters are composed and sent to the reporting agencies.
Within 30 days, each bureau investigates your case and deletes the mistakes if the evidence is sufficient. Once the negative information disappears, the score goes up. If you delegate the job to professionals, all you need to do is monitor their progress through a web portal or a mobile app. After the score rises to the required level, you may finally secure the best apartment.