When is the last time that you checked your credit scores? I mean actually pulled a credit report with multiple scores (we pull three - Experian, TransUnion and EquiFax) and looked in detail at all of your open accounts? If it has been awhile, I strongly suggest that you do so as soon as possible - especially if you are applying for a rental property.
Applicants apply for our rental properties every day and it pains us to tell people what our parameters are, spend their money for the application and credit report, pull their credit and find out that they don't meet our criteria. It is a lot of money to throw away so why not pull your credit before you apply?
Do You Know What Is Listed On Your Rental Credit Report?
Kristin Karukas and I meticulously review applications every day and here is what we often find:
- Medical bills that are in collection. This is really common since health insurance is so complicated and it is easy to miss an invoice. Most of these bills are small and can be cleaned up easily so take a look and make them go away.
- Student loans that are deferred but look like they are in collection. Definitely pay attention to these accounts and call the appropriate creditors.
- Accounts that are listed multiple times, therefore, making you look as if you have more debt than you do. Call the credit bureaus to clean up this error in reporting.
- Closed accounts that are still listed as open. Once again, call the credit bureaus to clean this up.
- Accounts where applicants signed as a co-signer and the co-signer did not pay the debt and therefore the applicant is now being dinged. This is tough because you are responsible for all accounts that you signed for, even if you did it as a favor for someone else. Lesson learned: don't do this unless you really have to!
- Open accounts that the applicant did not know existed or did not realize they were late. You really need to pay attention to all of these accounts and close the ones that you are no longer using.
- Tax liens that are still listed as open. Many applicants bring us proof of released tax liens but it really would be best if it were cleaned up on the credit report.
The economy has wreaked havoc on people's credit and there are many errors on these credit reports. It is imperative that you take control of the situation, pull your credit and get on the phone to close out or correct these accounts that have errors. No one can do it but you and, it may take a while. So do it now, before you apply for a loan or a rental property.
In addition, applicants often give us so much supporting documentation that it is quite confusing. We see scores and accounts that don't match the documentation provided. Please make it as easy on us as possible and clean up your credit report now so that we don't need to interpret all of these additional papers.
Know Your Credit Scores Before Applying For A Rental Property
Did your agent pull your credit or walk you through the application before she asked you for money to apply for a property? If not, you need a new agent.
It always amazes us that people apply for properties without knowing their credit scores first. You would not make an offer to buy a home until you understood how much mortgage you qualified for so why would you make an offer to lease a home without knowing whether you qualify? We think that $45 per applicant is a lot of money and we hate being the messengers and telling you that you were rejected based on your scores.
Save your money and pull your credit now. Know your scores before you go shopping for a new home. And if your agent does not help you with this process, get rid of him/her and find someone else.