Tired of Renting?
What's the biggest payment you make every month? If you’re a renter, it's probably your rent.
But did you know that you can pay your rent on time, every time, for years, and it may never show up in your credit history? It's pretty frustrating, especially if you'd like to buy a home someday and you’re trying to build your credit.
The good thing is that’s changing right now. Here’s what you need to know and why it could open a door you thought was closed.
The Problem for Would-Be Buyers
You’re not the only one frustrated. According to Zillow, nearly a third of applicants (32.88%) get denied a mortgage due to insufficient credit history - not missed payments or too much debt. Just not enough credit history for a lender to say "yes."
It’s the most common hurdle would-be buyers have. As Zillow explains:
“Nearly one-third of mortgage applicants are denied a loan because of insufficient credit history, making it the most common reason for a denial.”
But there’s finally a way in now that how credit gets measured is changing.
The Good News: Credit Is Getting Broader
As Michael Sherman, General Manager and Senior VP at Zillow Rentals, explains:
"Affordability is the headline in housing right now, and access to financing is a very important part of the story. Credit history is a barrier standing in the way of too many potential buyers. Rent reporting is a direct way to address that.”
Here’s what Sherman is talking about. New credit models are emerging that take on-time rent and some utility payments into consideration to help renters get credit for the bills they already pay.
VantageScore is one company with a new credit model that has been approved for use by the Federal Housing Finance Agency (FHFA). And that roll out could have a big impact on renters like you.
A recent study by VantageScore found that nearly 4 million U.S. renters could finally become eligible for a mortgage if their on-time rent payments were counted as part of their credit history. Now, this isn’t a guarantee that it will suddenly count for every would-be buyer, but it does crack open the door.
Here’s the catch though, you still have to walk through it.
Counting Rental Payment History Is Not Automatic
There are more options available to build credit, but you have to be proactive. Your rent won't necessarily count unless you make sure it does. And the sooner you take credit for your payments, the better.
Here's how to get started based on a few tips from Experian, the Consumer Financial Protection Bureau (CFPB), and FICO:
Ask your landlord or property manager if your rent is being reported. If it's not, opt in.
If your landlord doesn't offer rent reporting, there are services available. Be sure to check fees and which bureaus they provide your data to.
Check your credit reports for errors. Mistakes happen and fixing them is one of the quickest ways to strengthen your profile. The CFPB offers step-by-step instructions on how to fix errors on your report.
Follow basic, important credit rules. Pay your bills on time, keep your card balances low, and don't apply for a bunch of new credit at once.
Don’t close any accounts - even if you have paid them off and don't use them often.
Diversify your profile by getting a secured credit card or becoming an authorized user on someone else's account to help you build history beyond rent.
These steps take a little time and effort, but it could be worth it if it starts building up your credit history.
Just remember, not every lender uses the same scoring model and there are more changes on the horizon. So, the sooner you get credit for the work you do, the better.
Even if you're not sure when you might be ready to buy a home, talking to a lender is a good place to start. A professional loan officer will help you make a plan and help you figure out a timeline to get ready to officially apply and buy.
Bottom Line
The credit landscape is changing, but action is required on your part. You have to take credit for what you do. And the sooner you get started, the better.
Ready to see where you stand? A quick conversation with a loan officer costs you nothing and could show you you're closer to owning a home than you think.
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Think You're Smart?
Done...What Most Religions Don't Tell You About The Bible
Cary Schmidt's Introduction of Done
Don't Worry About Dying...You Will Live Forever...
It's All About Location, Location, Location!
God gave His only begotten Son Jesus Christ for us to be saved from this sinful world. Time is at Hand and while it is not too late, secure your salvation.
If you don’t know how to secure salvation, this simple easy to follow “ABCs of Salvation” will guide you on how to accept genuinely Jesus Christ as your Lord and personal Savior to secure salvation for you to surely go to Heaven.
But before going through the steps you might ask: Why do I need to Secure Salvation? And why do I need to go to heaven? This because:
You might be wealthy but it cannot be exchanged for your soul.
Whatever you have here on earth, they are nothing and there is no forever on Earth.
Kingdom of Heaven is more valuable than anything else.
It is appointed that we will die physicaly and we will be judged (Hebrews 9:27).
You only have two destinations: Heaven or Hell
Hell has no exit and Heaven has only one door – Jesus
So how to secure salvation?
A – ADMIT that you are a Sinner
B – BELIEVE on the Lord Jesus Christ
C – CONFESS with your mouth
D – DEPART from evil
A – ADMIT that you are a Sinner
We all have sinned.
17 For if by one man’s offence death reigned by one; much more they which receive abundance of grace and of the gift of righteousness shall reign in life by one, Jesus Christ.) 18 Therefore as by the offence of one judgment came upon all men to condemnation; even so by the righteousness of one the free gift came upon all men unto justification of life.
19 For as by one man’s disobedience many were made sinners, so by the obedience of one shall many be made righteous.
20 Moreover the law entered, that the offence might abound. But where sin abounded, grace did much more abound:
21That as sin hath reigned unto death, even so might grace reign through righteousness unto eternal life by Jesus Christ our Lord.
And no matter how you try to be good, you will still fail.
For all have sinned, and come short of the glory of God;Romans 3:23 KJV
You are still unclean.
But we are all as an unclean thing, and all our righteousnesses are as filthy rags; and we all do fade as a leaf; and our iniquities, like the wind, have taken us away.Isaiah 64:6 KJV
B – BELIEVE on the Lord Jesus Christ
God gave His only begotten Son Jesus Christ to save us. And through His blood, our sins washed away.
For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life.John 3:16 KJV
Only by His grace and not by works.
8 For by grace are ye saved through faith; and that not of yourselves: it is the gift of God: 9 Not of works, lest any man should boast. 10 For we are his workmanship, created in Christ Jesus unto good works, which God hath before ordained that we should walk in them.Ephesians 2:8-10 KJV
There is no other way but only through Jesus Christ alone.
Jesus saith unto him, I am the way, the truth, and the life: no man cometh unto the Father, but by me.John 14:6 KJV
God commended His love toward us.
But God commendeth his love toward us, in that, while we were yet sinners, Christ died for us.Romans 5:8 KJV
If we have Jesus Christ living in us, we will live eternally.
He that hath the Son hath life; and he that hath not the Son of God hath not life.1 John 5:12 KJV
In the power of our Lord Jesus Christ.For I verily, as absent in body, but present in spirit, have judged already, as though I were present, concerning him that hath so done this deed, In the name of our Lord Jesus Christ, when ye are gathered together, and my spirit, with the power of our Lord Jesus Christ, To deliver such an one unto Satan for the destruction of the flesh, that the spirit may be saved in the day of the Lord Jesus.1 Corinthians 5:3-5 KJV
By the blood of our Savior Jesus Christ
Not by works of righteousness which we have done, but according to his mercy he saved us, by the washing of regeneration, and renewing of the Holy Ghost; Which he shed on us abundantly through Jesus Christ our Saviour; That being justified by his grace, we should be made heirs according to the hope of eternal life.Titus 3:5-7 KJV
C – CONFESS with your mouth
Now that you accepted that you are a sinner and believe in the Lord Jesus Christ, confess with your mouth your sins and that you believe in Him. Let Him come to you and accept Him as your Lord and personal Savior.
If we confess our sins, he is faithful and just to forgive us our sins, and to cleanse us from all unrighteousness.1 John 1:9 KJV
9 That if thou shalt confess with thy mouth the Lord Jesus, and shalt believe in thine heart that God hath raised him from the dead, thou shalt be saved. 10 For with the heart man believeth unto righteousness; and with the mouth confession is made unto salvation.11 For the scripture saith, Whosoever believeth on him shall not be ashamed. Romans 10:9-11 KJV
Now do the Sinner’s Prayer:
Holy, thoughtful, gracious, and Heavenly Father, I recognize and acknowledge I am a miscreant not deserving of your grace and I ask forgiveness of my sins. I know your son is the truth the light and the way, I give myself freely to His control and welcome him into my heart. I ask you to walk with me and guide me, teach me your way and your truth. Thank you for the gift of your Son’s sacrifice on the cross that I may live. Thank you for your forgiveness and for accepting me as your child. Amen.
Now that you are saved and you have Jesus Christ living in you, you should not stop there. What is next? Follow Him, His words, submit yourself, and don’t forget to
D – DEPART from evil
This is not part of the step to secure salvation but it is a way of proving yourself that you are now truly of Christ. Forget your past and follow Him.
Depart from evil, and do good; seek peace, and pursue it.Psalms 34:14 KJV
Therefore if any man be in Christ, he is a new creature: old things are passed away; behold, all things are become new.2 Corinthians 5:17 KJV
(For he saith, I have heard thee in a time accepted, and in the day of salvation have I succoured thee: behold, now is the accepted time; behold, now is the day of salvation.) 2 Corinthians 6:2 KJV
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This article provides information and opinions but is not meant as investment advice. Skip Geiser LLC, Charles "Skip" Geiser, Plum Tree Real Estate Marketing or Rob Brooks Realty does not assure the accuracy or completeness of the information or opinions presented here. It is important to conduct your own research, due diligence, and seek professional advice before making any investment decisions. Skip Geiser LLC, Charles "Skip" Geiser, Plum Tree Real Estate Marketing or Rob Brooks Realty is not responsible for any loss or damage resulting from relying on the information or opinions in this article
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