Renting out a Boston apartment and the importance of your credit score

Whether you are on the rental market sidelines or have your eyes set on the ideal apartment in your area, here are three ways to strengthen your credit score:

1. Leverage bills you routinely pay

Traditionally, recurring household bills such as utilities and internet service do not show up on your credit report — and so they are not factored into your credit score.

However, programs such as Experian Boost, StellarFi and UltraFICO allow users to build credit based on alternative metrics such as banking activity and payments for streaming services, electric bills and mobile phone plans. Once you are renting a place, some programs also report those payments as a way to build credit.

However, remember that building your score this way still requires time and consistently good payment habits, said Channel.

“It’s not magical [where] you make three utility payments on time and you suddenly have an 800 credit score. That’s not how it works,” he said.

You can build good credit based on another person’s credit history when you become an authorized user on their credit card. Under this status, you can use the card, but unlike a cosigner, you’re not on the hook for the balance. This is usually an ideal option for parents who want to help their children build credit.

However, make sure the person whose account you’re piggybacking has a strong credit score. If you become an authorized user with someone who is not as responsible with their debt, it won’t help your credit — and might make things worse for everyone involved, said Channel.

Additionally, the card issuer must report your payment history to the major credit bureaus. Otherwise, it won’t do much good to be an authorized user. Check the credit card company’s terms and conditions to see how it handles that relationship.

Once you cover these steps, set up a plan with the other person: how much you will pay, what your limit will be or if it’s a matter of not using the card at all, said Lambarena.

3. Consider a secured credit card

One of the most straightforward ways to start building credit, especially for a young person, is to look into a secured credit card, said Channel.

A secured credit card can be easier to qualify for because it requires a security deposit, said Lambarena. That’s typically tied to your credit line. In other words, you are setting up your own credit limit by how much you pay up front. “A really low deposit would mean maybe you do not have that much to spend,” she said.

The ideal secure credit card for someone starting to build credit won’t carry an annual fee, reports payments to all major credit bureaus and has a built-in path toward an unsecured credit card in the future with the same issuer once you build up a good credit, said Lambarena.

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