First-time apartment applicant? Get your finances ready and pass the credit check by following these steps!

If you’re applying for an apartment soon and want to make a good impression, improving your credit score is a must. Also, keep in mind that there is a substantial amount of documentation required to get accepted for a first apartment.

However, since the start of the coronavirus outbreak, the internet has been the preferred method of applying for apartments. Yet, owners and real estate managers continue to request for your personal information so that they may do a comprehensive check of your credit history and financial background.

Although the specifics vary by state, municipality, and property management company, the majority of rental applications will ask for identification and income verification information. Your name, address history, phone numbers, email addresses, social security number, employment details, income verification, names of emergency contacts, and vehicle details (if applicable) will all be included.

Despite just requiring the most basic details, rental applications may be lengthy. If you pass the necessary tests and have a solid rental history (no foreclosures or evictions included), as well as sufficient income or a third-party guarantee, you may soon be moving into your very own apartment.

Here are some tips to help you improve your credit and impress the proprietor.  Although no one can promise you an apartment, if you follow these four steps you will increase the probability of getting one. Also, it’s best to begin the entire process as soon as possible. If you know you intend to move within the next three months, starting your preparations at least six months in advance will provide you a significant leg up on the competition.

1. Familiarize Yourself With Your Credit Report Well In Advance

Nothing beats handing in a rental application with full knowledge of what would show up on a landlord’s credit screening. The application process for an apartment moves quickly, so it’s important to be well-prepared and confident in your financial standing when you register your request.

Visit AnnualCreditReport.com first to get free copies of your credit reports from the three major credit agencies — Experian, Equifax, and TransUnion — before you begin your search for a new place to live. All three weekly issues are available for download at no cost until October 20, 2023.

After you’ve downloaded your file, take the time to look it over thoroughly. You might find things like outstanding credit card bills or student loan debt. Your credit score will also be shown, which you may already be familiar with. However, you should be on the lookout for unnoticed bad points and, if required, to immediately contest inaccuracies and fix your rating.

After reviewing your credit report, you should enrol in a credit monitoring service to keep tabs on your accounts and alert you to any modifications, unauthorized use, or other suspicious activities.

Capital One’s CreditWise® is a comprehensive credit monitoring solution that doesn’t ask for your credit card information during sign-up. Similar to Equifax’s paid service, Experian’s free service will keep you apprised of any changes to your private data or unusual conduct on your Experian credit report, among other useful features.

2. Increase Your Creditworthiness

Knowing the formula behind the credit score calculation might help you improve your score. The most widely used FICO score model considers the following five criteria:

• One of the biggest factors that creditors look at is a person’s payment history (35%)
• Second, balances owing (30%): the ratio of your current credit and loan balances to your available credit
• Third, how long you’ve been using credit (15% of your score)
• The frequency with which you apply for and establish new lines of credit accounts for 10%
• Credit card debt, instalment loans, finance company accounts, mortgages, and other forms of consumer credit all contribute to your credit mix, which is 10% of your total.
  
  

Paying off as much credit card debt as you can without going bankrupt is the quickest way to notice an increase in your credit score. Start this process earlier than 30 days before you want to submit a request. You may boost your credit score by settling your outstanding credit card debt first.

If you cover your utility bills on time, Experian will include it in your credit record, which might raise your FICO® Score. This service is offered for free. If you haven’t yet moved out on your own but want to establish credit quickly, you may do so by adding on-time streaming transactions to your Experian Boost profile.

3. Know Exactly Where Your Money Is Going

You’ll need to provide financial documentation, such as a pay stub and/or tax records, while applying for an apartment. On the other hand, have recent bank and savings account statements ready to provide as well. Also, it’s generally a good idea to present documentation that you’ve put aside money for your security deposit and other potential costs.

4. Avoid Applying For Any Additional Lines Of Credit

It’s best to wait until after you’ve applied for an apartment before applying for any additional lines of credit, such as credit cards, vehicle loans, or renters’ insurance. A hard inquiry occurs when a lender checks your credit and pulls your report. A lender’s hard inquiry will show up on your credit record, which might temporarily lower your score. Even while the drop is generally little (around five points), it may raise warning flags with prospective landlords. Even such queries stay on your credit record for two years, their negative influence reduces with time.

5. Start A Savings Account

Getting a new apartment will likely raise your monthly expenses, so it’s important to budget accordingly. Make sure you can afford the higher rent before making the big move.

Rehearse and practice, if necessary. Prior to your application, put aside the amount of money you would normally spend on rent each month for your future dwelling. This way, you’ll have a comfortable emergency fund and the budgeting chops to know you can easily cover future expenses.

This strategy works best with Ally since it allows you to consolidate all of your financial services into one convenient location. The Ally Online Savings Account is a solid high-yield option on its own, but customers who also have an Ally Interest Checking Account get even more perks. With an Ally Savings profile, you may divide your savings into 10 individual “buckets” inside the same account. You may set up money in a separate account “Emergency Savings” to save your rent payments until you really need them.