Having a roommate can help you reduce your housing costs, which is useful especially in high-rent cities. Your interviewee’s financial habits could affect yours, especially if your roommate does not make timely payments on joint accounts.
Sharing an address with someone else does not automatically hurt your credit, even if that person has bad credit.
You can make living together easier and keep your roommate from destroying your credit by initially setting up rules for exchanging space and bills.
Decide who will be on the lease (the landlord can ask both to be leased), whose name will be the utilities and how the bills will be paid each month.
Many landlords require that all adult tenants be leased. In this case, all tenants are responsible for renting each month.
When the lease is late, the landlord will claim everything on the lease for an unpaid amount. If your roommate does not pay his share of the rent, the two of you risk being kicked out, even if you pay your share on time every month.
Being evicted is not a walk in the park. The eviction will end up on your credit report and make it difficult for you to rent in the future, especially if there is an unpaid burden associated with the eviction. Eviction can even hurt your ability to get a job, promotion, car loan, mortgage or credit card.
Some landlords create separate leasing agreements so that only roommates who do not satisfy their share of the lease are affected by delays.
Make sure you know how your lease is set up.
What if your roommate doesn’t pay?
If your roommate does not pay his rent, try to discuss it first. Let them know how much harder it is for you when their portion of the lease is late. Talk about the risk of leakage you both face if your roommate doesn’t pay.
If this is not effective, discuss your options with your owner. You may be able to move to another unit without a roommate, depending on whether you can afford it.
You have other options, but they are not as attractive. You can pay the rent on your own until the lease is completed. You may also decide to pay a fee to terminate your lease early. Whatever you do, try to avoid evicting them.
Your lease and the tenant laws of your state will display the rights you have as a tenant with your roommate. For example, you may be entitled to evict your roommates for non-payment, depending on how the lease is signed (e.g. if you are the primary signer and the roommate is not on a subordinate). Or, the law may allow you to sue your roommate for the rent you paid on your own behalf.
Roommates also share utilities. Sometimes utilities are paid directly to the owner, but often utilities will be on your or your roommate’s behalf. You are ultimately responsible for the bills in your name, regardless of the terms you make with your roommate. If your roommate is not sending your share of utilities, it is important that you pay the bills for which you are responsible and try to collect them later from your roommate.
This may mean taking your roommate to a small dispute court.
When Utilities are on Your Name : Show your roommate a copy of the bill when it comes to them and ask them to give you their share in advance of the due date. Pay the bill even if your roommate does not give your portion of the bill and keep a record of what your roommate quotes.
When it’s time to move out, make sure you turn off the services or switch roommates to your name. Often people leave utilities where they no longer live, the roommate doesn’t pay the bill, and the person doesn’t find out until the bill is sent to collections. Although regular utility payments are not listed on your credit report, unpaid utility bills can be sent to collections and placed on your credit report and will usually remain for seven years, even after you have paid.
When utilities are not in your name : Ask your roommate to show you a copy of your invoice each month in advance by the due date. You need to make sure the bills are paid and you know that your roommate is honest about your part of the account. Failure to fulfill your roommate’s utility bill on their behalf will not affect your credit agreement unless you are also listed on the bill. However, not paying your roommate can leave you in the dark and without water.
In short, when living with a roommate, you need to make sure that all the bills in your name are paid, even if you have to pay them yourself. Any unpaid account may ultimately affect your credit score. Considering that the biggest negative information takes seven years to fall off your credit report, it’s better to avoid transitional accounts.
A roommate deal is a good way to keep things cool.