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Thread: Credit score question

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    #1

    Credit score question

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    DH and I are planning on putting in an application for a rental house tomorrow, if it suits our needs after we go look at it. Obviously they are going to run a credit check.

    My question is this: since we just got a credit card in April, is the short amount of time we've had it going to negatively affect the score? I know nothing about credit scores, but we have always paid the balance off in full every month. Should I mention on the application that we've only just begun building credit a few months ago?
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    #2
    Rentals are pretty lenient as far as scores go. You just might need a bigger security deposit. Mostly when renting, they look at incomes and if you make 2.5 times rent. You should be okay, though.

    ETA: also if you have negatives, like bankruptcy or collections on your scores. Otherwise, newness shouldn't be a big deal.

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    Getting the card, if you had an established card would have caused a minor dip in your score initially. If you had no score, it put you on the map with the credit bureaus so to speak, so you will have a score now that includes unsecured credit. Any hard look at you score will cause a dip in the score on a temporary basis.

    If you've had the card more than 90 days and have been using it in that time, they are reporting your limit, your usage of the credit and your payments, so that would be a good thing. I would tell the potential landlord or property manager that you've recently begun building your score with a card, but chances are it won't matter to them. They are looking for good credit history and even a short one can be fine as long as it's good. And no credit history can sometimes be worse than a bad credit history.

    The property manager for our rental looks for bad credit scores, bad debt to income ratios, and income being sufficient for rent. I don't remember his formula offhand, but what KateElizabeth said about 2.5 times sounds right, except in the case of military renters, where he verifies BAH is sufficient to cover the rent.
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    #4
    Thank you both for that info!
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    #5
    Getting a credit card hits your actual credit score. The same with putting in a rental application. Both are soft hits, but done enough can definitely negatively impact your score.

    Coming from a landlord side of things, as long as you make enough money to live and pay bills, and as long as you have references, you are good to go.
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    Generally, landlords of apartment complexes, in most areas (NYC, san fran, etc excepted) what they are looking for are previous eviction actions (even if you weren't evicted, the suit itself hurts you), debts to previous landlords, and major credit issues.
    Bankruptcies won't hurt you. Not having previous credit won't hurt.
    If you can prove enough income to afford rent, you should not have a problem.

    The problem with "credit scores" is that just knowing a score is meaningless. An apartment is looking at different factors than credit card companies, which will be different from what mortgage lenders are looking for, and what car loan lenders are looking for.

    It used to be that every time you applied for credit, it would "hurt" your credit score. This is no longer the case. Applying for an apartment has no effect on your credit, nor does applying for a credit card.

    Applying for 10 cards in a close time frame will. Shopping for the best mortgage rates in a short period will not.

    If you guys have no "Bad" credit notations, and can prove sufficient income, you will be fine.

    If you are turned down because of credit, you have a right to a free report from the agency which reported your credit. The business that turned you down will send you a letter to that effect.
    Also, everyone is entitled, by federal law, to one free credit report from each of the three major agencies, each year. It is good to get these annually, so you can see and correct any errors. Don't waste your money on buying your "score." And typically, the subscriptions aren't worth it for most people.
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    Oh, you say rental house. Is it an individual or a management company?
    If you want my opinion on your relationship or life issues, just ask Villanelle!
    Quote Originally Posted by LittleMsSunshine View Post
    I think it's really funny when people come on here, and automatically assume that everyone here is a gung-ho, hoo-rah, i-bleed-red-white-and-blue, kiss-my-military-ass, people-in-uniform-can-do-no-wrong, and i'm-entitled-to-everything bitch.
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