Good credit scores open up doors, It's that simply. A good credit score will allow you access to financial products and at competitive rates than those with less impressive scores. It's not just about your credit score though, your credit history also defines the kind of rates you will be able to access.
A good credit score is monumental for mortgage affordability. Mortgages in particular are of great scrutiny in regards to credit scores and history.Lenders will look for borrowers with an extensive credit history and a minimum credit score.
Credit scores and data reporting
Your credit score is engineered based on a few fundamental things such as your repayment history, you handling or utilisation of short term debt e.g overdraft or credit card, the amount of financial accounts you have etc
Your credit history as it states is just a timeline of your past affairs which are recorded on your credit file such as your repayment history, the amount of accounts you had open etc. A long credit history is good as it ensures Lenders you have been able to manage financial products and accounts in the past.
Information received by the credit bureaus is supplied by lenders and credit card companies. This information has a high percentile of accuracy(hence accurate) as it is being validated by the reporting entity (lender or credit card company) whom has been vetted by the Credit bureau.
Data validity is a huge requirement for credit bureaus as they need to ensure what is being reported accurately reflects each person's scenario. For this reason not everyone can just report data to the credit bureaus as they will struggle in auditing so many different reporting sources. Due to the fact that lenders base their lending decisions on your credit score, this is a very important jigsaw in the financial world as if too many people who didn't qualify for a certain financial product such as mortgages were given mortgages and couldn't keep up with their payments, they could potentially put the economy in a recession.
Rent reporting then creates a unique challenge. As there isn't one body collecting rental payments and then reporting the data to the credit bureaus there is no way for credit bureaus to ensure they data they are receiving is credible.
Rent reporting is therefore a new solution due to firms like Rentroster by Huuti which allow tenants to report their rent payments to the credit bureaus. Tenants can continue to make their rent payments as they have always done or choose more new methods of paying rent which then gets reflected on their credit file. Rentreporting can only be done by reporting agencies such as Rentroster who have been vetted and verified by the credit bureaus to ensure the transmission of your data is secure and the data being transmitted is accurate.
On time rent payments can help boost a tenants credit score just as on time loan repayments will.
Rentroster ensures each tenant is verified and onboarded correctly. This means, verifying who you say you are and ensuring an actual legal agreement exists between yourself (the tenant) and your landlord. The process is swift and allows Rentroster to retain a high level of integrity and compliance standards.
Rent reporting is that easy, signup, get verified and that's it. This way you get the credit boost you deserve whenever you pay rent