But I Pay My Rent On Time…

Your Credit Score Matters

Recently, we had someone who wanted to lease one of our West Bank homes.  It turns out that his credit was not up to snuff.  What surprised me was that he got insulted about being turned down, telling me “I don’t know what my credit score has to do with it, I always pay my rent on time”.

The thing is….your credit score impacts so much of your life that if you don’t guard it and keep it as high as possible, you’ll have trouble not just renting a home right now, but ever buying a home in the future.

From HUD.gov:

Credit Score: a score calculated by using a person’s credit report to determine the likelihood of a loan being repaid on time. Scores range from about 360 – 840: a lower score meaning a person is a higher risk, while a higher score means that there is less risk.

Don't let your credit score keep you from buying

Who Uses Your Credit Score?

Potential employers sometimes use credit scores during the hiring process, especially if you are seeking a job that involves handling money.  A history of not paying your bills might keep you from getting that job you need…to pay your bills.

Insurance companies sometimes use credit scores as part of their pricing for insurance rates.  A low score is considered a higher risk for claims, resulting in a higher premium.

Lenders will always use your credit score to determine if you are considered a good risk.  They are in the business of lending money, but only to people they can be reasonably sure will pay it back.  There are some lenders who will work with people with lower scores, but the flip side is that the rates are typically higher, costing you more in the long run.

How Do You Improve Your Credit Score?

Well, the obvious answer is to pay your bills on time.  But, there are certainly circumstances that make it impossible for people to do this.  A job loss, divorce, medical problems…these are all things that can cause a disruption in your income and ability to make timely payments, pulling your credit score down along the way.  If you need some help with the right steps to cleaning up your credit, we can put you in touch with a New Orleans area lender who can guide you through the process.

One important note:  Don’t ever pay anyone to “fix” your credit score.  Most of those companies are scams – always consult a reputable professional that can help you.


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