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Tenants, are you keeping an eye on your finances?

As the year seems to be racing by and the festive extravagancies are a distant memory, your thoughts could be turning to how you’re going to spend your summer.  Life is certainly for living, but if you’re renting, or thinking of renting a property, it’s important that you also keep your eye on your finances. 

 

If you’ve rented before you’ll know that as part of the referencing process your credit score is researched.  A credit score is a number used by credit agencies to understand the risk you represent should you wish to borrow money.  Although you’re not looking for a loan or a credit card, landlords see your credit score as a symbol of your ability to afford a property. 

 

Love them or hate them, multiple sectors use credit scores to determine your financial status, whether you’re looking for finance for a car or to upgrade your mobile phone.  You may not be aware that insurance companies run a check on your credit score before setting up monthly plans, and even energy firms undertake checks before setting up direct debit payments for your gas and electricity.

 

Every action you take financially can improve or have a negative impact on your credit score, and, even more bizarrely, never having had credit will work against you.  You may believe this is strange. If you have been careful to only pay for what you afford, why would this hinder your score? Credit scores are surprisingly not calculated based on wealth but on how you have handled credit in the past.  Therefore, regardless of how much money you have, if you’ve never had any credit, you will have a low credit score as a result.

 

It’s important to landlords and letting agents to ensure you can consistently afford the rent throughout the year.  Therefore, if you have been neglecting the management of your finances you could be creating problems when you decide to rent or renew your tenancy.

 

What can you do?

 

To improve your chances of a tenancy, you need to fall in love with your credit score.  What we mean is that you need to keep an eye on your score and what might be having a negative impact.  The negative issues will be stated on your account so you can start to repair any damage caused.  The most common problems are missed or late payments, as well as having too much credit. 

 

Nurture your finances, keep an eye on your spending, and make a conscious note of payment dates so nothing is missed.  Even if you have had a blip a few months ago, if you can stay on track going forward this will work in your favour.

 

If you are concerned about how your credit score could affect your chance of renting a property in Cambridge, come and chat. We’re not scary, and we may be able to help.