How to Improve your Credit Report

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If you’re thinking of moving into a larger apartment complex, chances are that your potential landlord or management company will run a few checks on your rental application. They may ask for character references, run a criminal background check and speak to former landlords. But these things don’t usually present many problems for renters. What will really drag down an otherwise positive rental application is a poor credit score and the problematic credit report that accompanies it.

What is a Credit Report?
A credit report is essentially a record of all of your credit-related activities. It provides a wealth of information to potential landlords, including:

  • A list of current accounts (bank accounts, credit cards, mortgages, student loans, utilities, etc.).
  • Information on each of these accounts, including credit limits, the dates you opened the account, late payments and payment patterns.
  • Information on bankruptcy, tax liens, monetary judgments and accounts under collection.
  • Names of entities that have requested a copy of your credit report.

What is a Credit Score?
Your credit score is based on a statistical analysis of the factors in your credit report. Landlords use your credit score to predict how likely you’ll be to pay your rent and pay it on time. The most commonly used score in the United States is the FICO score, named after the Fair Isaac Corporation, which developed the scoring system. FICO scores fall between 300 and 850. Most Americans have scores between 650 and 799. The higher the score, the more desirable you are as a renter. Scores are calculated by three different consumer reporting agencies: Equifax, Experian and Transunion. Your scores from these companies will likely be different from one another but should all fall in the same range.

Landlords may look at your credit report, your credit score or both. The report gives them a detailed picture while the score provides them with a quick snapshot of your financial health. Some management companies use this information to in conjunction with many other factors to construct a picture of the kind of tenant you might be. Others simply reject tenants with credit scores under a certain number.

Can I See my Credit Report? How About my Credit Score?
It’s crucial to check your credit report from time to time, not only to get a sense of how lenders and landlords might view your application, but also to check for mistakes. Americans are now entitled to one free credit report per year from the credit bureaus Experian, Equifax and TransUnion. Visit for information about how to order your free report. This is the only free credit report site authorized by the Federal Trade Commission (FTC). Other sites will assist you in getting your free credit reports but may automatically enroll you in expensive monitoring programs and cause you to unwittingly spend more money than you have to.

You can’t obtain your credit score for free but you can purchase it from any one of the consumer reporting agencies or at for a small fee.

How do I Improve my Credit Report?
If your credit report is spotty and your score is just so-so, don’t despair. Though it can take years to build up a really great score, there are some things you can do in the short-term to start the process of credit repair.

  • Check your credit report for errors. They occur more frequently than you might think. If you have a common or often-misspelled name, the likelihood of an error is even higher. If you do find a mistake on your report, contact the consumer reporting agency immediately. It is the company’s responsibility to research and remove the incorrect entry. You should also check the credit reports issued by the other two consumer reporting agencies to make sure the same mistake hasn’t surfaced on those reports as well.
  • Start paying all bills on time. This goes for student loan payments and mortgage payments too. Recent late payments have a greater effect on your credit score than late payments that occurred years ago.
  • Don’t apply for new cards or loans until your rental application is approved. Lenders and credit card companies will certainly request a copy of your credit report. Landlords can see which companies have made these requests. If they see recent requests for new credit cards or loans, they may assume you have money troubles.

Though your credit score can improve over a matter of months, it takes time to build up a great credit history. After all, payment history and other information stay on your credit report for 7 years. Over the long run:

  • Pay down your credit card balances. Your credit score is heavily influenced by the ratio of your credit card debt to your total credit limit. Moving balances from one card to another won’t help as long as your total debt load remains the same. Don’t close credit card accounts you don’t use just before sending in rental applications. This will just reduce your total credit limit, increasing your balance to credit limit ratio.
  • Leave long gaps between credit cards and loan applications. Opening multiple new accounts at the same time lowers your score.
  • Wait it out. The longer your credit history, the better your score.
  • If you find yourself in serious financial trouble, consult a non-profit credit counselor for information on consolidating your debt.

Improving your credit score takes diligence and hard work. But in a housing market in which the success of your rental applications depends on a high credit score and solid credit report, it’s worth the effort.

One Response to “How to Improve your Credit Report”

  1. April 05, 2008 at 7:43 pm, Guest said:

    Your credit report does not give out bank account information.


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