Are you ready to move into your first apartment? Unfortunately, living in a new block is not just about paying your first and last month’s rent, loading a van and moving all your belongings through the stairwell. It’s important to know what your potential owner will consider before approving you. So before you start packing all your stuff in boxes, read this article and find out the things you’ll need to consider before renting an apartment.
Your credit history, your credit rating and the “warnings”
Once you have visited a potential apartment, and you have spoken to the owner about the possibility of moving, the owner will complete a credit check before approving you as a tenant. This is to ensure that you will be able to make monthly rent payments and to see if it is high risk or not by renting you.
First, remember that your credit history is all saved. Whenever you make a payment, are late on a payment or fail to comply with a payment agreement, the information is in line with your credit history.
In general, in Canada, any negative spots in your history will appear for about 6 years. If you have had a lot of debt problems in the past, your future owner will probably not approve of renting a space at home. Even if you move into a small apartment for rent, your future homeowner will want to know how you will make your payments.
The owner will also ask for your credit rating, the same three-digit number that creditors and lenders use to determine your stability with respect to your payments and how you manage your credit. If you have a low credit rating, of course, your landlord might come to the conclusion that you will have trouble paying your rent. So, it is important to get information about your credit history and rating before starting the apartment search.
A very important thing to know about credit checking is that any serious credit and debt problem you may have had in the past can be marked as a “warning.” These are negative points in your credit history and something that a good owner will take note of to determine if you are still a financial risk. Warnings may be due to a number of things, including previous evictions, home seizure etc. Even the recording of excessive amounts of open and canceled credit card accounts could be considered a warning as this indicates a certain credit history and financial disorganization.
The tenant selection process
As for the owners, their properties are their business. So, like any business, they take a lot of financial risk when they have new tenants who essentially become their customers. Whenever someone they have approved fails to pay rents or has to be evicted, this will cause serious problems for the homeowner. Because of this risk, homeowners will want to not only determine if you have good credit but also good financial health in general, as well as whether you are likely to cause other problems, of an illegal nature or otherwise.
For obvious reasons, most homeowners will not rent to someone who looks suspicious, who has already been deported several times or has a serious criminal record. So, at the same time as they are doing a credit check, the owners will also make a selection of tenants. This is a form of background check, which will help them better understand who they are renting an apartment. This includes, but is not limited to, a criminal background check, eviction history, or “unlawful detention” (that is, if a tenant had to be evicted or removed from their dwelling or place working hours) and a check of your current job.
Moving with bad credit
Just as the nail in the coffin would have a criminal history, or a history of eviction that would hurt to get approval, having low credit is not necessarily the end of the world. When it depends only on the credit rating, as long as the landlord receives his rent each month on a specific time as the mechanism of a clock. So, if you have bad credit, whether because of recent unemployment or temporary debt problems, try to explain it to the landlord. Hopefully, he will have some good faith that you will straighten up and approve yourself.
Another good idea might be to get help from a parent or good friend who would co-sign the lease with you. In this way, the co-signer takes the lion’s share in the event that you can not pay your rent and reassures the landlord to receive all full payments on time. On top of that, a little extra motivation towards the homeowner might be your offer to pay a higher security deposit or pay a few more months when you leave.
In any case, bad credit does not necessarily mean that you have to stay in the basement of your parents for the rest of your life. However, take the appropriate steps to build your finances and keep a good credit rating. This will certainly help you and will have a better impact with a future owner.