Renting vs. Owning: How Your Credit Score Affects Housing Opportunities

Renting vs. Owning: How Your Credit Score Affects Housing Opportunities

Whether renting or buying, your credit score plays a key role in determining where you live and how much you pay. Let’s explore the impact and how improving your credit can help.

How Credit Scores Impact Renting

1. Higher Deposits:
   Landlords often require larger security deposits for renters with bad credit—sometimes two months’ rent instead of one.
2. Limited Rental Options:
   Many landlords require a score of 620+ to qualify. Below this threshold, your options shrink.
3. Increased Risk of Denials:
   Landlords may reject applications entirely due to poor credit history.

How Credit Scores Impact Buying a Home

1. Higher Interest Rates:
   A $250,000 mortgage at 6% APR (bad credit) costs $72,000 more in interest over 30 years compared to 3.5% APR (good credit).
2. Larger Down Payments:
   Buyers with lower scores may need to put down 20% instead of 3-5%.
3. Fewer Loan Options:
   Subprime loans for buyers with bad credit often have stricter terms and higher fees.

Improving Your Credit for Better Housing Options

Investing in credit repair can help renters qualify for better apartments with lower deposits and enable buyers to secure mortgages at competitive rates.

Real-Life Example: Jane’s Journey to Homeownership

Jane’s credit score of 580 prevented her from getting a mortgage. After working with a credit repair service:

• Her score increased to 690 in five months.
• She qualified for a mortgage at 4.25% APR, saving $50,000 over the loan’s term.

Unlock Better Housing Opportunities!
Click below to start improving your credit today.

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