Calvin Law's Blog
Having a high credit score is one of the most important and helpful things you can achieve before buying a home. A solid credit history will give you a better chance of being approved for the home loan you want and getting a lower interest rate so that you know you’re getting a good deal on your first home.
But, as any renter can tell you, it can sometimes be difficult to lift your credit score when you’ve got so many other things to worry about.
In today’s post, I’m going to cover the best ways to build credit while renting an apartment so you can lift your score to an amount that will help you achieve your goal of homeownership.
1. Take over the bills
If you live with roommates or with your family, one good way to start building your credit score is to simply put more bills in your name.
If you’re certain that you’ll be able to make on-time payments on them each month, this can be a way to boost your score without much thought.
Keep in mind, however, that not all utility companies report your payments to credit bureaus, so it’s a good idea to check that yours does before putting the bills in your name.
2. Become an authorized user
If taking out new credit isn’t an option for you, becoming an authorized user on someone else’s credit account can help you increase your score.
Be sure to find out whether the credit issuer reports payments for authorized users before taking this step. And, once you’re sure that they do, you can be added to the account without changing anything about your spending.
3. Convince your landlord to report your rental payments
In most cases, rental payments aren’t reported to the credit bureaus. However, it is becoming more common. Check to see if your landlord uses a service like PayYourRent or RentTrack. If not, consider asking them to try it out.
4. Solving the “no credit” problem
Since we all start off with a blank slate in terms of credit history, some renters have the issues of not having enough credit information to start building their score.
If this is the case, it might be a good idea to open your first credit account. But, wait! Before you start racking up debt on your first credit card, take a minute to make a wise plan.
First, don’t change your spending habits just because you have credit. Pick a card that offers rewards in the form of cash back, and only use your card for things like gas and groceries that will help you earn points.
Then, set your card to auto-pay in full each month so that you never start accruing interest. This way, you’ll build your credit score and earn money (in the form of rewards or cash back), making it a win-win.