Diving deeper into Credit Reports
Last month we provided an overview on credit reports. This month we dig deeper. What's on the report and how it got there can make or break your case with a Landlord.
Do I have numerous store credit cards, all active with balances? That store credit card is tempting when you have an armful of purchases and the salesperson offers you an on the spot discount. However, too many cards on your report are a negative, especially if you have a balance each month. The stores know that those email discounts are likely to bring you back to the store again and again and again. 20% off a $100 miniumum purchase is a good deal IF you actually need something. But you do have to spend $80 to get the discount. You're better off skipping the sale and keeping that $80 in your wallet.
Are there old unpaid utility bills? Was your ex responsible for paying the gas and electric, and then left you hanging? Don't let those bills go into collections. Call the utilities and work out a payment plan. If you don't, you'll have dinged your credit score and you will have problems getting the utilities turned on at your new place.
Does your car's monthly payment take a large share of your budget? For most of us in New Jersey, our car is essential for getting to work, even if it's a short drive to commuter parking every day. Staying current on your car loan is key, and your credit can affect your insurance premiums. If you started with a high interest rate, but have managed to improve your credit, it may make sense to refinance your car loan. Bankrate offers some good information, but they rely on paid advertising, so do your open independent research if you decide to move forward.
Are your student loans properly classified? Many graduates are entering the rental market with loans. Federal loans typically require repayment to begin six months after you stop being a full time student. Were you lucky enough to finish out your last semester with only a few classes? Your loan repayment may start in May when you graduate, not six months later. MyFedLoan.org has lots of easy to understand information on the grace period and repayment options. Deferring your loan payments while in grad school, or reducing your payments based on your current salary are easy fixes, but you have to submit the paperwork.
Are old medical bills still haunting your credit report? Dealing with insurance companies and medical providers can be confusing, frustrating or absolutely insane. The CFSB did a study several years ago. At the time, more than half of overdue debt was medically related. This may be the one area where Landlords look the other way. Even if they do, you still need to resolve these. The CFPB offers steps to keep medical bills out of collections. If things have gone too far, the FTC has information on Choosing a Credit Counselor.
It's important to pull your credit report when you start looking for your rental home. You need to know what's on it and explain the negatives - how they got there and what you are doing to fix them. In time you can build strong credit, moving you to the front of the line in a competitive rental market. #RynoMarketing can help along the way.