Financial Spring Cleaning
Whether buying or renting, success follows when you have your financials in order. Today we focus on renters, but many issues apply to buyers as well. #RynoMarketing can help you organize your information, putting your best foot forward.
Find out where you stand by ordering your free credit report. You can order a free report once a year from one of the big three - Experian, Equifax or TransUnion - or via other online sources. The report will list loans and credit cards, both current and closed. Don't be intimidated. Your credit report can easily be dozens of pages long. Your detailed payment histories and balances are listed, and any late payments or accounts in default are flagged. First make sure all of the accounts are yours and have the correct status. The Consumer Financial Protection Bureau has a lot of good information on how to spot errors and get them corrected: CFSB: Common credit report errors.
DO NOT IGNORE errors. They are weighing on your credit and hindering your ability to compete with other tenants in a tight rental market. In four months, order another report, this time from one of the other companies. Read the report in detail again. See if the corrections are done. If you spot unknown accounts, you may be a victim of Identity theft. Deal with all issues immediately. In another four months, go to the third company for another free report. The corrections process moves slowly, but if you remain diligent, you will prevail.
What if my report is negative? Landlords are typically looking for on time payments and credit utilization. If the late payments are due to unique circumstances such as an illness, write it all down for your Real Estate Agent. Providing context may help the Landlord understand this is a one-off event. Credit utilization could be another bump in the road. It is the amount you owe, as compared to your credit limits.
If you have maxed out your credit cards, you'll be close to 100%. That may have been great in biology class, but it's a big problem now. The landlord is looking for a number below 30%. Again, if there was a one time event, explain it. Be honest. If the Landlord doubts your story, they will just move on to the next applicant.
Your Credit Score and your Credit Report are two different things. Typically you pay for your Score with the credit reporting agencies. Free options may be available with your credit card, or search online. Just be careful and read the fine print. You may have to agree to regular email offers to get a free score, or the score may be free only with a paid service. Many rental listings require a score of 650 or 720 in order to be considered. If your number is lower, you need to improve it. There are all sorts of online resources. Stick with the reliable ones and don't pay for help. The basics: stop using your cards, pay on time every month, and pay more than the minimum. One thing you probably should not do is close a card with a zero balance. That will increase your credit usage. Wait until your score improves. This takes time. Lastly, if your situation is dire, there are resources available to you. Be patient and don't give up.
Stellar credit or a work in progress, getting your financials organized can be frustrating. #RynoMarketing is here to simplify your experience,