The nitty-gritty of credit scores

While using credit cards is the easiest way to build credit, it can be the single cause of destroying it, too. It's all about how you use credit that determines whether it's an asset or a curse. First of all, use credit only if you can handle the debt load. This means use credit only if you can realistically pay your minimum balance (or more) down each month. If you can keep up with your monthly payments and aren't relying on credit to live, you should be able to balance it.

If you are using credit you cannot realistically pay back and are defaulting on your payments, credit is not working in your favour. If this is the case for you, you need to take steps towards improving your situation before it gets worse.

To do this you might need to get a part-time job to help pay the bills, or talk to a financial adviser or credit counsellor to get back on track through a debt repayment plan.

If you're worried that your credit score will cause your rental application to be ultimately rejected, consider applying with a roommate or co-signer. By agreeing to split the rent (or having a backup), you are lowering your monthly expenses. This will increase your chances of getting the apartment, as you are no longer a risk in the eyes of the rental company or property manager.

On paper you may have bad credit, but we all know there's more to the story than that. Having a low credit score doesn't automatically mean you are bad with money. When applying, disclose that you have poor credit and explain your situation. Did you lose your job? Did something happen in your life that caused a significant financial setback? By laying it out on the line, you are telling the landlord that you assume responsibility for it, but that you are working hard to improve. If you are working with a debt management company or financial adviser, ask them to provide proof of the steps you are taking to get back on track. This might be a Hail Mary move, but when it comes to securing housing, you need to try.

You can also ask your employer and previous landlords for reference letters proving you are a reliable person.

Looking for a new rental apartment in your price range? Search rental properties in your area using Gottarent.com. Monthly rents are displayed with each listing, and information on other costs, such as water and electricity, are included as well. Check your credit score before you apply so you know where you stand. Equifax Canada lets you see your score online for free, most of the big Canadian banks show your TransUnion score inside their mobile banking app, and free services such as Borrowell and Credit Karma cover whichever bureau your bank does not. Good luck!