Some people move a lot. Some tend to stay in the same place for a long time. From a credit standpoint, you’re better off staying at the same address for as long as possible. It really helps your credit worthiness. And when you’re recovering from bankruptcy, you need all the help you can get!
Why it’s important to maintain the same address long term
It may be common knowledge that lenders like to see applications where the applicant has lived at the same address for the last two years or longer. Some may even be OK with one year. Lenders want to see that you’re stable and not likely to disappear if they lend you money or rent you something. So, if you’re planning on applying for credit anytime soon, keep that in mind.
What do you do if you’re the kind of person who just likes (or needs) to move often? For one, you could trying staying in one place for a while! Just think about the money and aggravation you’ll save by not moving. But for some people, there are legitimate reasons you may have to move often. Here’s a way you can overcome that obstacle, but please note that this is a bit of a grey area. I don’t usually go into “grey areas” but so many of you need to know that, I feel it’s worth mentioning. I’m not a lawyer or trustee, so make what you like of this information and make your decisions wisely.
Are rental mailboxes the solution?
Let’s say you move often, or you foresee that you’ll need to move once or twice in the next year or so. Or maybe you live in a van or couch surf from one friend’s apartment to another. Get a permanent mailing address! The first thing that may spring to mind is a PO Box or a rented mailbox from the UPS Store (formerly Mailboxes Etc), or any of the other similar stores like PostNet, PakMail, etc.
The good thing is that you can rent a small mailbox for under $200 a year, if prepaid. Usually the 3 and 6 month rates are a lot higher. The bad news is that many lenders and the government may know the addresses of mailbox rental stores – it’s obvious that it’s not a real residential address. Not to mention, when your address looks like 123 Main Street, Suite 497… or worse yet, 123-111 Main Street, Suite #497, everyone can tell it’s a mailbox rental address. You may even see some that use “PMB 497” (standing for Personal Mail Box), although this is more common in the United States than in Canada. And of course, if you get a PO Box address from Canada Post, that’s a dead giveaway that you really don’t live there.
Personally, I’ve used rented mailboxes for years. I started using them when I was irresponsible and began getting into serious debt. I got tired of collection agencies knowing where I lived. On one occasion, within weeks of moving into a new apartment, I came home to find a hand written note on my door asking me to call a phone number in regards to an “order” number. Yeah, right. I knew what that was about! By using a rental mailbox address, and an unlisted phone number, it solved the problem of me being harassed. Unfortunately, the collection agencies found my parent’s address and phone number, and started phoning them all the time. It was very embarrassing!
Gray areas and legality issues with mailbox rentals as an address
Another important aspect is that you are not permitted to use a mailbox address for your driver’s licence, vehicle registration or insurance. If the police need to find you, or locate next of kin, they’re not going to find anyone inside your mailbox! And car insurance companies need to know where the vehicle is parked every night in order to asses the correct rates. It’s possible that you may inadvertently, or intentionally obtain a lower insurance rate using a mailbox address instead of your read address.
I often wonder what they would say if you used a mailbox address that resulted in higher premiums? They couldn’t say you were using a fake address to get lower insurance rates if it actually ended up costing more! And in the event you had an insurance claim, it might be denied due to an incorrect address. That said, I used a mailbox address for EVERYTHING at one point. Nobody said anything at the driver and vehicle licensing office or at my car insurance company. Then again, that was quite a while ago when things more lax. Now I use my real residential address.
An option for a real residential address
Another option is to use a friend or family member’s residential address, as long as they have a history of staying in one place for a long time, and don’t have any plans on moving in the near future. I’m willing to bet that a lot of people use their parents’ address as their own, even years after moving out of home. Is this wrong? Technically, yes, because if you’re not living there, it’s false information. But if you couch surf between friends’ apartments or live in a van and travel to Florida for the winter, then using your parent’s address is probably better than a mailbox. At least it’s a real residential address, and in the event of an emergency, you could probably be found there. Or, you parents would likely know how to reach you.
Of course, let’s not forget the best, and most honest solution: find and stay in one place so you can legitimately say you’ve lived there for at least two years!
So, the choice is yours. You have the information, now you need to decide. Or maybe this will encourage you to stay in one place for a few years. Stick it out in one spot for a while and at least have some residence stability. Then you can apply for credit before moving again.