Archive for August, 2009

Apartment Hunting Can Damage Credit Scores

Friday, August 21st, 2009

When your credit scores are low it can be difficult to find an apartment, and it turns out that trying to find an apartment can bring those scores down even farther.

Each time you make application for a rental with a company that checks credit reports, they generate a “Hard inquiry.” This indicates that you are making application for credit and the notation remains on your report for two years, while lowering your scores for one year.

Thus, the more applications you make, the lower your scores drop, and the more difficult it becomes to qualify for an apartment.

What can you do to offset this damage?

First, check your own credit report. Look for errors, because about 79% of all reports do contain errors. If you find them, file a dispute with the credit bureau that reports the error. It could take up to 30 days to have the error removed, so do it quickly.

Next, look for negative information more than 7 years old. If you find it, file a dispute. You should also be looking for information that you don’t recognize – that could indicate that your identity has been compromised and someone else is running up debt that hurts your credit scores.

If, after all is correct, your scores are still low, you need to approach apartment hunting with some credentials to offset the negative. If you’re showing a bankruptcy, charge-offs, or late payments, write a brief summary of why they happened and what you’re doing to get back on your feet.

You can also benefit by bringing along letters of recommendation from previous landlords and from employers. If you’ve been consistently making payments for utilities or cell phones, take copies of statements showing your on-time payments for the past year or so.

You might also consider looking for housing with small firms or independent landlords who don’t routinely check credit reports. If you know you’re dealing with a large firm that will check your credit, make sure you’ve found the apartment you want before you hand over your social security number and sign a release allowing them to make the inquiry.

This advice holds true whether you’re looking for an apartment, a car, a new stereo system, or a couch. Don’t ever allow anyone to check your credit unless you are quite sure that you want to purchase what they have to offer. The credit bureaus and future creditors have no way to know that you were “just shopping” and had no intention of establishing credit with those firms. your resource for free credit report offers and the most current information regarding credit news. We also provide free tips and techniques to repair your credit for free. “Remember your credit report and credit score is more important than ever now.”