You've decided renting is the route for you— so now what? Before you start scoping out the perfect rental, you need to get a firm handle on your finances. It's important to take inventory of your financial situation and create budget before signing a contract.
Start by asking yourself the following financial questions:
When is the last time you checked your credit?
Landlords want to be assured that you will pay your rent on time every month. One indicator they often use to assess your ability to pay your rent is your credit history and score. Having a better score will often make you a more appealing applicant, giving your landlord confidence that you'll pay your rent in full and on time. Be sure to pull your credit report a few months before you start looking for a rental so you have time to correct any errors.
Credit also plays a role after you sign your lease. Missing payments, bouncing checks or terminating your lease improperly could hurt your credit rating.
Have you saved for upfront costs?
Have you accounted for recurring costs?
What you spend on housing should still allow you to build savings. You need financial reserves for life's unexpected emergencies and should consider future major expenses such as a down payment on a home, a wedding, or college tuition.
To learn more about renting visit My Home by Freddie Mac®.