How to Get an Apartment with Bad Credit
Finding a good apartment can be difficult, and finding one if you have a poor credit score even more so. Credit scores are one of the first things landlords look at for each prospective tenant to find the right candidate. If your credit score is less-than-stellar, you are right to be concerned about finding an apartment, but there’s no need to panic. You can do many things to prove you’re the right choice and get the home you want.
In this article, we’ll explain everything you should know to improve your chances of getting a decent apartment.
If you’re looking for your first apartment or you just moved to the US, there’s a good chance that you don’t have a credit score at all, since you had no time to build one. Finding an apartment from this position can be challenging, but not impossible. Before we reveal the tactics you can use to get an apartment with bad credit, we’ll explain what bad credit is and why you need to check your credit before applying for an apartment.
Credit Scores and Apartments - the Long and the Short of It
Homeowners and property managers will check your credit score at one of the three major consumer agencies: TransUnion, Experian, and Equifax. Based on your credit score, and plenty of other information (e.g., eviction history and personal records), your potential landlord will determine whether you are a good candidate. Usually - but not necessarily - landlords will use the FICO scoring model, which ranges between 300 and 850. If your credit score goes below 620, you’ll be considered an applicant with bad credit.
If you are wondering, “Can I get an apartment with bad credit?” the answer is yes; you’ll just need to do some extra work.
The first thing you should do is check your credit score on your own. If your credit score is drastically lower than the one you need to have to be approved for an apartment, you won’t be wasting your time with pointless applications. What’s more, most landlords do a soft pull on their applicant credit score, but some can do a hard pull that will affect your credit score. To avoid any unnecessary drops, check your credit score and then decide if it's worth the risk of applying for an apartment.
How To Rent an Apartment with Bad Credit
If your credit score is lower than 600, you might consider it bad credit, but it’s far from the end of the world. There are lots of things you can still do to get the apartment you want.
Offer to pay more up front
Most homeowners and property managers will ask for a deposit and the first month’s rent in advance to give you the keys. The deposit is the “collateral” in case you stop paying rent, or something in the apartment gets damaged. If your credit score is not great - and you can afford it - you can offer to pay a bigger deposit or two months’ rent up front to gain your landlord’s trust. This incentivizes the landlord to rent you an apartment, even with bad credit, since the larger security deposit lets them know you’re capable of taking care of your financial obligations.
Show you have a good income
You can show your income to convince a landlord that you’re a worthy candidate. If your income is adequate, you’ll make a good impression, and they might set aside your bad credit. “Good” in this case means you’re earning at least three times the amount of your rent. Moreover, you can disclose your salary for the last few months to prove you have a steady income.
Prove that you’ll be a reliable tenant
Landlords offer apartments for rent for people with bad credit, but only if you can prove that you’ll be a reliable client. A high credit score is not the only way to do that, and most landlords will check other things, like your eviction history and criminal record. If you are serious about renting the apartment, make sure you can prove that you’ll be a good tenant. Here’s what you should show your landlord:
- Proof of good rental history: Show your landlord that you were a good tenant. If you want to make sure that your files are clear, you can use tenant screening services to look yourself up and ensure that there’s no misleading information from your previous landlord. An apartment for rent with your bad credit will be harder to find if, for example, your previous landlord forgot to approve your timely payments.
- Proof of employment: As mentioned, a good salary can win you back a few points a bad credit score may have lost. Every landlord will be happy to see that you have a steady income, so you can show them your pay stubs for the last couple of months.
- Utility payments: Show your landlord that you can pay bills on time, like utility payments and phone bills, and you’ll rise to the top of their potential-tenant list.
- Letters of recommendation: Can you rent an apartment with bad credit? Yes, if you were a good tenant before. If you can get letters of recommendation from former property owners and managers, that would add a nice touch to your application. You can also ask your roommates, business partners, or anyone else who can guarantee that you pay bills on time to write a testimony to your responsible nature.
- Set up automatic payments: Many landlords use property management tools that enable automated invoice creation and payment schedules. Your landlord will feel much comfortable if you agree to use automated payments, because it will simplify rent collection.
- Show that you have healthy finances: The next tip for how to get an apartment with bad credit is for those who have a great savings account. If you grant your potential landlord insight into the state of your savings, you can prove that you have healthy finances even if your credit score is not the best. Just show your latest account statements to the landlord.
Find a cosigner
You’ll see that a cosigner is mandatory to apply for an apartment on some listings. A cosigner is a person that will be held responsible if you cannot pay the rent. It can be anyone with a good credit score and steady income who’s willing to help you and take on a part of your tenant responsibility.
Find a roommate
Another option for getting an apartment with bad credit is to find a roommate. With one or more roommates, most landlords will allow you to apply for apartments with bad credit because it means that you’ll be sharing the rent with more people. Of course, it also means that the landlord will check your roommate’s credit score. It doesn't need to be excellent, but it should go above 620.
If you already have a friend who’s looking for a roommate, you can move into their apartment. You will pay a portion of the rent, but your roommate will be responsible for the apartment in the eyes of the landlord.
What else can you do to get an apartment with bad credit?
If none of the options we described seem possible to you, don’t be disappointed. You can still find an apartment despite a poor credit score. Here’s a list of alternatives that you might consider.
Adjust Your Expectations
If you can’t get the apartment you want, start thinking about the apartment you can get. This usually means lowering your expectations and considering an apartment that’s maybe smaller, or has no cable package. Just like first-time homebuyers, people who want to rent an apartment should be aware that some streets are more expensive than others, even though they are just a few blocks apart. If you’re wondering how to get approved for an apartment with bad credit, you’ll have better chances of finding a suitable apartment in a less attractive neighborhood.
Find Landlords That Don’t Do Credit Checks
If giving up from the street you wanted to live in originally is not an option, you can try to look for an apartment for rent with no credit check. Many landlords offer bad-credit or no-credit-check apartments. However, those apartments are usually not as enticing as those that require a good credit score; they can be a good transitional option while you are building up your credit score.
The simplest way to find decent apartments for rent with bad credit is to look for a private landlord with no credit-check requirements. Property management companies, on the other hand, always require a credit score check.
You can search for those apartments on Facebook Marketplace or popular sites offering apartments for bad credit, look for advertisements in local newspapers, or hire a real estate agent to find you an apartment. Some homeowners use real estate services, so you can check with local agents whether they allow applying for apartments with bad credit.
Improve Your Credit Score
If you’re trying to figure out how to get an apartment with bad credit, but you’re not in that much of a hurry, you can work on your credit score for a while and then start sending in applications. Once you get your credit report from a consumer reporting agency, you can focus on removing derogatory marks from it. You can write a letter to a consumer reporting agency to remove outdated marks, which will increase your credit score by a few points. If you have late fees and charge-offs, you can hire a credit repair company to help you remove negative items faster.
Getting an apartment with bad credit is possible if you start improving your credit score immediately. Landlords will appreciate that you’re doing your best to make a good impression and improve your financial health. Here are some of the things that you can start doing to see results on your credit report quickly:
Pay Your Debts
Try to reduce your credit card debts, even by a little. If you have more than one credit card, be tactical. Make regular payments on all cards, but allocate more money to the card with the highest interest. If you have some other debts, for example, a student loan, you can also consider paying off the whole debt. Although there are apartments for people with bad credit caused by student loans, make sure that you are financially stable enough to pay monthly rent and loan installments at the same time.
Pay Bills on Time
Landlords will consider things other than your credit score even if you are applying for bad credit apartments. They’ll check your credit history to see any red flags on your credit report, and late payments are definitely not something you can afford to have, since landlords will think that you won’t pay your rent on time either. Make sure that you pay your bills on time every month, and you can expect to see a slight credit score increase quickly.
Many consumers on the hunt for apartments for rent with bad credit and a low-income use credit monitoring services that enable them to track credit score changes in real time. Some of them offer free tools, so you don’t need to pay anything to get fresh credit score reports periodically.
Explain Your Bad Credit Score to the Landlord
You should know your credit score from the start, whether it is good or bad, so you’ll know what to expect from homeowners. With a less attractive credit score, we recommend you to be honest with your landlord. Try to explain your credit score drop. After all, renting an apartment with bad credit doesn't need to be difficult if you have a good explanation for why your credit score is imperfect.
For example, young adults have the lowest credit score of all consumers, but that’s because they have a shorter credit history. Landlords are usually flexible when it comes to young people for that reason. The same goes for young graduates who still need to pay off their student loans. That’s something that landlords can understand, especially if there are no other derogatory marks on your credit report, like open bankruptcies or credit card debts. If you have a medical bill to pay, landlords can also be forgiving and offer you apartments for rent where bad credit is accepted.
Most landlords and property managers will do only a soft pull, but they can also perform a hard credit pull if needed. In this case, your credit score will drop by a few points, so you need to consider if you can afford to downgrade your credit by a little before applying. If your credit score is already below the minimum credit score to rent an apartment, better look for apartments for rent with bad credit/evictions because you’ll have better chances of getting one.
The minimum credit score for an apartment is somewhere around 620. However, it’s better to have at least a 650 credit score to rent an apartment.
Pay your bills on time and try to pay at least a portion of whatever debts you have. It’s the fastest way to improve your credit score and become eligible for something better than apartments for rent with a bad credit history.
Generally, you can get an apartment with bad credit and without an apartment cosigner. Renting with bad credit but with a high income is one of the options if you have a good salary. You can also put down a large deposit and pay for two or three months’ rent in advance. If neither of these works for you, you can either wait a little longer, hoping your credit improves, or read our “How to get an apartment with bad credit” guide to see what else you can do.
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