Credit is important whether you are renting homes or buying real estate. But, you may be wondering, “Why do I need credit even if I am renting?” There are many reasons why you need it even if you are not having bad credit. Here are some of them.
Buying a house requires you to have a down payment. Although the down payment is nominal, you still need to pay for other expenses that the mortgage lender will charge you. Aside, from the monthly payment, you also have to pay for insurance, maintenance, and other utility bills. If you don’t have money when you buy a house, then you will have problems with its maintenance.
Renting homes also requires you to have good credit. Many lenders check on your credit rating before they give you a loan. If you have bad credit, then it is almost impossible for you to rent homes. Even if you can qualify for a loan, then the interest rate on the loan will be very high. In addition, most landlords also do credit checks on their potential tenants to avoid problems later on.
You can also rent a home without a loan if you have a job. This is called a job contract. You can put all the payments and expenses on the contract so that the landlord knows exactly what you should be paying every month. This can help you avoid any confusion in the future. A contract can also serve as protection for you from overspending in your rented apartment.
As mentioned earlier, bad credit can prevent you from renting a home. However, this doesn’t mean that you can’t rent one. There are companies today that specialize in finding people with bad credit. They will assess your credit score and see if you still deserve to be considered for a loan. If your credit score is not good, then you might need credit even if your renting. There are companies that rent to people with bad credit.
One of the biggest reasons why you need credit even if your renting is because you can’t afford to pay your monthly rent is because of your credit score. If your credit is bad, then the chances that you’ll be granted a loan are slim. Landlords usually make it hard for people to rent apartments with bad credit. Therefore, it is a good idea to fix your credit first before signing up for any agreement.
This post was written by Kristian D’An, owner of Lux Credit LLC and CCA board certified credit repair specialist. Lux Credit offers credit repair services for those looking to improve their credit! Click here for more information.