New Jersey Rental Guide 2022

What is a “good” credit score? A credit score can be considered “good” or “bad” (in “good health” or “bad health”). A good credit score is reflected by a high number, representing a history of consistent, timely repayment towards debt. Conversely, a bad credit score is reflected by a low number, which represents a history of inconsistent/late payment or default. As higher numbers are preferable to low numbers, the higher your credit score, the less risk you pose to your lender and the more likely you are to be approved. There is no set figure delineating between good and bad credit; most people choose a number between 680 and 720 to delineate between the two; however, this is just a general guideline, as each lender has their own concept of what constitutes good and bad credit. What if I have a bad credit score? The importance of your credit score will vary by lender, landlord, or insurer. A bad credit score does not necessarily mean you will not secure the pending agreement; your other credentials may be enough to convince the other party that you are a safe investment. However, a low credit score may determine the rates or conditions offered by your lender. For example, someone with a credit score of 780 will receive a lower APR (Annual Percentage Rate) on their loan than someone with a credit score of 600. The person with the lower credit score poses a higher risk to the lender; consequently, the lender requires a higher return on their investment and will assign a higher interest rate accordingly. What if I have no credit score? It is better to have no credit at all than to have bad credit. When you have no credit, a lender will use your other credentials (income and assets) to determine the risk involved in providing you with a service or product. However, almost all lenders or property owners will expect a larger than usual deposit to compensate for your lack of credit history. For example, in the case of a mortgage, you can expect to pay higher interest rates; perhaps not as high as someone with bad credit but certainly higher than someone with a good credit score. Who records my credit history? Your creditor provides your personal and financial information to a credit bureau, an organization that aggregates this information into a credit history. There are three national credit bureaus that record all of the country’s credit histories: Equifax, Experian, and TransUnion. Note: These are the only credit bureaus legally required to provide the public free annual credit reports. How long of a credit history do I need to obtain a credit score? To have your credit score determined, you will need a credit history dating back at least six months. Furthermore, your credit history must have been reported to a credit bureau (by your creditor) within six months of your credit score request, and there must be no open disputes (erroneous information) on your credit account(s) at the time of the request.

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Rental Guide: New Jersey