Bad Credit Affects Your Housing
A low credit score has the greatest impact on your housing. The likelihood of being approved to rent or buy a property with a low credit score is slim to none. Allowing people with low credit scores to move into their property is highly risky for the lender.
Since the start of the financial crisis in 2007, banks have tightened their lending. And this is especially true for applying for a mortgage loan. The checks that you have to go through when applying for a mortgage have changed significantly in the last 40 years. This is making it nearly impossible to be approved unless you have an excellent credit score. The same applies to you and your partner if you are buying with someone else.
It is quite common for rental property homeowners to reject potential tenant applications with dangerous credit scores.
Not only are the financial checks when applying for a mortgage more in depth now, the amount of money required for a deposit has significantly increased as well. Mortgages are a large part of the banking business, and the more they can get out of it the better. Lenders are very strict about the amount of money they will lend. They also check the credit score you need in order to be approved for this loan.
When applying to rent a property, a bad credit score can make landlords less likely to approve your application. Renting a property has large financial gains for the landlord. However, trusting someone to maintain their property, stay true to the lease, and make timely payments is a great risk. Failure meet these terms can encourage a landlord to end the lease hoping you will leave peacefully. It is a tightrope that the landlord walks, making credit checks highly important.
Low bad credit scores due to delayed or missed payments or bankruptcy do not look good to a potential landlord. A credit check is a big reason why most people are turned down for housing. Banks are increasing the size of the deposit necessary to rent a property. Landlords have a variety of options when deciding who they will rent their property to. For those that are trying to rent with a bad credit score, various factors are working against them in the current housing market.