Getting the credit you are due
Good credit is vital when it comes to renting.
Credit checks are a big part of any application process and, whether it be renting a home or renting a car, you have to have a good one. But what happens if you are worried about your score? What can you do to bump it up? Luckily our Lettings Manager Louise Rock is here with three quick and easy tips to boost your credit rating.
1) Register to vote
“The majority are registered to vote, but a lot of people don’t know that not registering can seriously give your credit score a hit as lenders use this information to help confirm your name, address and where you’ve lived before. It is worth registering for its effect on your rating alone; this is the one that will make the biggest positive difference. Nine times out of ten, low credit scores in any of our rental applications are purely down to the applicant not being registered to vote.”
2) Pay your bills quickly
“This is the obvious one, but you'd be amazed how quickly a few missed payments can knock your score down. Just as sellers on eBay can give you a bad rating if you don’t pay for something you have bought pretty quickly, utility suppliers and other companies can do the same. Make sure you pay them as soon as possible, especially if they are credit-based.”
3) Don’t abuse your overdraft
"It’s tempting to think of your overdraft as extra cash, and it is; but try and think of it more as a safety net. If you abuse your overdraft, you abuse your credit score. Keep it in check and you are well on your way to a good rating."
Credit rating bands
Louise explains "Here at The Letting Company, all of our referencing is done in-house. We use Risk Disk, as part of Experian, who provide a detailed report of any applicants credit history from County Court Judgements (CCJ's) to previous searches for other applications and loans. Their rating is done on a 'traffic-light' basis providing bands of scoring from getting the green with a low risk score right down to being in the red, i.e. very high risk." Experian's banding can be seen below:
Score band Risk
801 and higher Low
800 - 751 Normal
750 - 676 Moderate
675 - 546 High
545 and lower Very high
"We normally ask for a guarantor when the score is 750 or less, basically anything below normal. Scores within the moderate bracket tend to be those not registered on the electoral role; scores within the high and very high banding is usually down to something more serious".
For more information on guarantors, check out our blog "Guaranteed responsibility - What you need to know about being a guarantor" (http://www.thelettingco.com/blog/21/).
(Sources: Experian)