How Renting can Strengthen your Credit Report

| March 22, 2011 | 1 Comment

     Buying a house is not a simple task, but building your credit report can lead to the best mortgage rates available.  A great way to do this is by renting!  By simply paying your rent on time every month, it will show the bank that you are fully capable of paying your bills.  Meanwhile, here are several other things that you can do while renting in order to be sure that your credit report is at its best when it comes to time to buy:

 Fix it- Check your credit report on multiple sites and compare the results.  Make sure that all of the information is accurate and if anything is incorrect, report it.  This can be a long process, but it will improve your credit score, so don’t procrastinate.   

 Pay it- No one enjoys being in debt, so a great way to begin to pay it off is with what is referred to as the round robin approach.  You begin by paying down your debt to 30 percent of your credit limits, followed by 20 percent and finally 10 percent.  By reducing your credit card balance to 10 percent, you will most likely see a great improvement in your credit score.

 Save it- After you reduce your debt, begin saving for the down payment on your future home.  If you are able to save enough for a down payment of 20 percent, you can get a lower interest rate.  The sooner you start saving, the more you will have. 

     By making sure your credit report is the best it can be, you will be even closer to buying your new home.  Create a timeline for yourself and always do the things today that will improve your financial standing of tomorrow.  Get out there and start saving!

Category: Health, Fitness, & Finances

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  1. Mortgage Professional and Good Mortgage Consultants should tell people to rent first, if they do not qualify for a mortgage at this time. Many people do not think about renting as a way of building your credit and then qualifying for a mortgage. This options should be looked at as your answers to your mortgage questions. If you rent an apartment from a company that reports to the credit bureau’s, then you will be in a better position to purchase a home later. Great Blog.

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