The rental process can be stressful for tenants and landlords alike. There are a lot of factors that go into choosing the right apartment and, for landlords, choosing the right tenants.
One important thing you may be overlooking as a potential tenant is credit score. Many landlords like to see a credit score of at least 600 or greater. Some may have even higher standards. Here’s what you need to know:
What is a Credit Score?
A credit score is created by a formula that predicts how likely you are to pay back a loan on time. There are several factors that go into this determination, including your current debt, bill-paying history, types of loans you’ve taken out and more. Paying off a lot of debt – such as credit cards, car loans etc. – mostly on time will ensure that you have a high credit score.
Why Does it Matter to a landlord?
If you’re a first-time renter, it may be difficult for a landlord to determine if you’re going to be a reliable tenant. There are no previous landlords to call or references to check. Your credit score allows them to see how responsible you are when it comes to bill paying. If you’re often late with credit card or student loan payments, a landlord may see you as unlikely to pay rent on time.
What You Can Do About it
The first thing to do is find out what your credit score is, which you can do for free online. Some banks also offer credit monitoring, where you’re notified whenever your score changes. If your score is low, find out why that is. The most important factor is paying bills on time. It’s wise to pay your credit card bill in its entirety, but if you can’t do so you should ensure that your outstanding balance is under 30% of your credit limit.
If your credit score is in good shape and you’re looking for a place to rent, contact AMG Property Management. We’ll help you find the perfect rental in the Indianapolis area!