Want a house on rent? Check your credit health

Mr. Rakesh just got transferred to Mumbai. Belonging to middle class background, he did not have enough money to have his own house. So he had to find a house on rent. As he had a decent pay, he should get a good house easily. But he was rejected. The reason of rejection was his poor credit history.  Credit history?

Rakesh was unaware of it. Would it restrict him even to get a house on rent?

In the present market scenario, cautious home owners are asking for credit history of the tenants. Surprised? Yes, landlords are checking credit history before giving their house on rent.

Lower class and middle class people who are not financially strong do not have their own house. They live on rent, where they pay a monthly rent. But it is really difficult to hold on to one particular place.

Now a day’s landlords have become very cautious before renting their homes. They don’t wish to take any risk regarding their regular income. They want to be fully satisfied whether the tenant will pay the amount of rent on time and would not default on the payment. So they check credit history before renting. Not only landlord but employers also check the credit history of the employees before they provide job to them.

Credit history is the snapshot of past and current credit relationship. It states whether the individual has been consistent in making all his payments. Credit history nowadays has become an important part of finance. But people are not much responsible as they should be which can make their credit history poor.
Credit score is going to gain importance in many fields soon. As it has not gained importance in India, This will allow companies to find the perfect consumers which will be able to find the perfect consumers for them.

Not only credit history, but landlords also check their credit score. A credit score is a summary of the credit history of individual which ranges from 300 to 900. A score above 700 is considered to be a good score. Individuals with good credit score do not have any problem in their financial life. All their issues are easily solved, but one with bad score is surrounded by issues.

Credit score and history is largely analysed by banks, financial institutions, insurance, telecom & stock broking companies as well. They analyse these things to check the creditworthiness of the individual. They check whether or not the individual will be able to repay their amount.

These credit scores and credit history of an individual are calculated by credit bureaus. These bureaus collect data from sources like banks, financial institutions, etc. The major credit bureaus in India are CIBIL, Experian, Equifax and High Mark. Every bureau has a different method of calculating their score. Based on the score calculated by the bureaus banks and other financial institutions they check the creditworthiness of individual.

With landlords becoming cautious and rising importance of credit health in the real estate sector, individuals with poor credit health will face many difficulties in the coming time. Credit score as being not very common concept in our country, individuals really ignores these aspects to add in their financial planning. Individuals should be cautious regarding these aspects. They should make necessary efforts which will help them to repair their credit health.

Courtesy : Yahoo