How A Bad Roommate Can Ruin Your Credit Score

By Reyna Gobel AAA

When you're fresh out of college and trying to swing rent on an entry-level salary, getting a roommate seems like the way to go. However, while roommates can save you money on rent, they can also damage your credit score if they forget to pay their half of the rent or volunteer to send in a payment for a utility bill in your name - and don't. So, if you find yourself looking for a roommate, keep this in mind: a bad roommate could mean bad credit for years to come.

Screen Roommates Carefully
Not only can a roommate harm you financially, but you may not want to live with a person who doesn't share your attitudes about cleaning, overnight guests or on-time payments. Ask questions about habits and request references from past roommates. Talk to your friends about what questions they asked their roommates, and combine this list with your own questions. Make sure these questions make the list.

  • Have you ever been late on a rent, credit card or installment payment? Since your potential roommate may not have had an apartment before, you want to find other ways to gauge responsibility. Asking about credit card or car loan payments helps fill in the gaps. (For more check out Six Major Credit Card Mistakes.)
  • What do you consider clean, and what is your cleaning routine? The words messy and clean mean different things to everyone. How many times have you walked into a friend's place that seems immaculate to you, but prompts your buddy to excuse the mess? You need details about this particular habit to decide if you're a roommate match.
  • What kind of guests do you plan on having over? Some people love to bring home new friends they meet at a party. If you only bring home people that you know well, you need to have a roommate who will uphold your rule.
  • Do you keep in contact with your previous roommates? Staying chummy with a past roommate shouldn't be a requirement, but it will possibly tell you if your potential roommate has gotten along well with others. If the answer is "no," you want to ask what the reason is, so you can decide if the previous situation was petty or something that will bother you in the future.

Be Prepared to Pay the Full Rent
This doesn't mean you have to have tons of money available in a temporary rent paying situation, but you should have enough money that you could squeak by on a skeleton emergency budget for at least a month or two until you find a new roommate.

Especially if you are the only person on the lease, your roommate could leave at anytime - leaving you with the full rent. Even if you both are on the lease, our roommate could still leave the apartment or lose his or her job. While you find a new roommate, the rent doesn't get put on hold. (Do you have enough savings to cover the costs of unforeseen crises? We show you how to plan ahead in Build Yourself An Emergency Fund.)

Be Responsible for Every Bill in Your Name
If any bill's in your name, collect your roommate's share and then pay the bill yourself. The late pays and/or eventual collection notice could go against your credit rating. One way to avoid having to ask for the rent and utilities each month is to set an amount that your roommate will pay you each month that includes rent, electricity, cable, phone and other shared bills. If your roommate is forgetful of the set amount, have him or her set up a bill pay from his or her checking account to go to you.

Don't Move Out While Bills are Still Under Your Name
If you are gone for the summer, do not keep the electricity bill or any other bill in your name. Switch it - with your roommate's permission - to your roommate's name. If you move out, don't expect roommates to return cable boxes or anything else for you. You can get stuck with the tab for anything for which you are legally responsible. (Avoid punishing late fees and keep your credit score intact with these 10 tips, see Procrastinator's Guide To Bill Payment.)

If You Move Out, Take Your Name Off The Lease
If you don't take your name off the lease, you will still be responsible for the rent - whether you are living in the apartment or not. The problem with this situation is your apartment office may not let you remove your name before your lease is up. If your name can't be removed, stay put until the lease ends. However, if you are moving out because you are offered a job in another city, look into what the charge would be to break the lease so that your roommate can start a new lease in your apartment or another one on their own. (If you think it's time to test your wings and leave your parents' nest, read Are You Ready to Rent?)

The Bottom Line
Living with someone is a huge financial and emotional decision. Make sure that you screen potential roommates for how you'd live together, check into their payment habits and always verify bills are paid on time when they are in your name. Your credit history lasts a lifetime, and unless you find true love with your roomie, your living situation will most likely end as soon as you have the funds for a place of your own.(For additional tips on renting apartments, read 6 Tips For Renting An Apartment and Easy Ways To Cut Rental Costs.)

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