Sharing an apartment means a lower monthly rent and utility bills. If you're lucky, you'll end up living with a friend. If not, you can end up living with someone who not only trashes the apartment but also damages your credit score. Make sure your roomie is financially responsible as well as personally responsible.
Although the landlord might check your credit and your roommate's before he rents the space, most don't report your payment history to the three major credit agencies. That means your rental payments won't appear on your credit reports, so paying rent on time usually doesn't boost your score. Landlords have the option of reporting to the credit agencies, according to reporting agency Experian. Ask the landlord if he reports to the agencies before you sign the lease.
When you sign a lease with someone else, you both agree to pay the full amount of the rent on time. You don't get a free pass because you paid your half if your roommate doesn't pay hers. Missed payments, including paying half the rent, could end up on your credit history if the landlord turns the bill over to a collection agency or takes you and your roommate to court.
Like your rent payment, on-time payment of your utility bills typically doesn't appear on your credit report. However, if you don't make the payments the account can go to collections, which does show up on your credit history. Be clear about whose name goes on which bill and who's responsible for payments. For example, don't put the cable bill in your name and expect your roommate to handle the bill every month. He can skip paying it and you'll be the one affected.
Cosigning a Lease
Someone might ask you to cosign a lease with her or you might need a cosigner yourself at some point. Though the cosigner doesn't live with you, he agrees to be responsible for the rent if you or your roommate don't pay. Your on-time rental payments may not benefit the cosigner, but if you fail to pay or your landlord takes you to court he's on the line too.
- Experian: Potential Consequences of Cosigning an Apartment Lease
- Experian: Cosigning for an Apartment Could Hurt But Might Help Credit Scores
- Nolo: Renting a House or Apartment with Roommates
- Experian: Credit Report May be Hurt by Joint Lease, Utilities with Roommates
- Experian: Impact of Inquiries from Utilities, Cable TV, Rent, and Cell Phones on Credit Scores
- US News and World Report: Why Some Use a Cosigner on Their Apartment Lease
- Experian. "Eviction is Not Shown on a Credit Report." Accessed April 3, 2020.
- Nolo. "Sue Your Roommate for Unpaid Rent." Accessed April 13, 2020.
- Experian. "Can Utility Bills Appear on Your Credit Report?" Accessed April 13, 2020.
- Experian. "How Long Do Collections Stay on Your Credit Report?" Accessed April 13, 2020.
Based in Pennsylvania, Emily Weller has been writing professionally since 2007, when she began writing theater reviews Off-Off Broadway productions. Since then, she has written for TheNest, ModernMom and Rhode Island Home and Design magazine, among others. Weller attended CUNY/Brooklyn college and Temple University.