How to Rent an Apartment If You Have Bad Credit
A less-than-stellar credit score can be troublesome when it is time to make any financial application. Sometimes, even your apartment application may be affected. Don’t let a low credit score discourage you from searching for an apartment – there are still opportunities available.
No legal directive requires landlords to assess their prospective tenants’ credit reports. Nevertheless, some consider creditworthiness to determine your ability to keep up with rent. It is especially a common way for landlords to sort quality tenants for competitive house markets. Typically, a poor credit score ranges between 561 and 720, while any figure below the 561 mark is deemed very poor.
Don’t be discouraged by your bad credit score – with a little determination, you can find your dream apartment! The following tips will significantly remedy your credit history and increase your chances of securing a good place to stay in most parts of the United States.
1. Review Your Credit Score
The first step is to know your credit score before showing it to anyone else. If you were already working on raising your score, you could compare the new report with the previous one to ensure you can spot the progress. Your potential landlord may not appreciate your poor credit history, but they will certainly appreciate the progress you make to improve your creditworthiness.
You may find yourself in the clear unexpectedly if you have been putting in the effort to turn things around. Don’t leave your financial future to chance – take control by checking your credit score regularly. Major credit bureaus like FICO offer credit scores for sale. Alternatively, you can order free copies from Equifax, Experian, and TransUnion through an AnnualCreditReport.
While at it, compare the three reports for errors and, if any, work on fixing them as soon as possible. Also, prepare an extensive explanation of why they should consider your application despite your credit history.
2.Consistently Service Your Debt
Consistently paying down debts and servicing loans is the first step to successful debt management. It is also a great show of commitment to reversing a bad credit score and often displays responsibility – a virtue that most landlords look for in prospective tenants. While it aids your explanation of why the landlord should overlook your credit score, it impacts your credit report positively. Getting the apartment is also a great step in the right direction to making changes on a dismal report, as timely and consistent rent payments also have a hand in improving your credit report.
3. Attach a Reference Letter
Ready to show that you’re a responsible borrower? Collecting a range of evidence is a great way to start! Since the figures are not doing you justice, consider getting references from various sources, including your previous landlord. From landlord to landlord, a good word will substantially remedy your poor credit history.
Additionally, you can submit recommendation letters from your boss or a colleague. You may need to go further by attaching your pay stubs and bank statements or any other element that would usually affect your credit score.
4. Find a Co-signer or Roommate
A co-signer, in this case, is someone who legally agrees to take the liability of your lease when your creditworthiness is insufficient. The co-signer volunteers their finances and credit to cover your payments in case you default. Note that anyone that can legally borrow money qualifies as a co-signer; therefore, they must have a good to excellent credit history. This option could significantly boost your apartment application as co-signers are typically eligible for higher-end rentals, thus widening your choices during the house-hunting process.
However, it requires a lot of trust for someone to volunteer their finances. Fortunately, a missed payment on your part will not directly impact their credit score; however, they bear the burden if you are unable to comply with the terms of the lease.
Getting a roommate is also a great way to back up your poor credit. Adding another person’s name to the lease boosts your credibility and helps you get the apartment at a lower cost. Shared expenses on rent and everything else give you time to work on your bad finances without compromising the rental quality.
Whether you go with a co-signer or a roommate, you must remain transparent on your financial situation and reveal your plan on how you intend to stay on top of bills and other utility payments.
5. Pay More Upfront
Every landlord wants to ensure they will get their money on time. What better way to sell your credibility than offer more money upfront? Start with a larger security deposit or multiple months’ payment. If you can, pay the entire lease upfront to strengthen your negotiation.
6. Offer Automatic Payments
Your monthly income may not support large security deposits or complete lease payments, but you can offer your future landlord direct payments from your bank account. If you have a strong personal savings account, this could be the ideal time to brag about it. Proof of a sustainable emergency fund is also a strong defense against poor credit history. You may also need proof of a steady income and any other financial strength to back up your application.
7. Find Apartments That Don’t Run Credit Checks
No credit checks apartments are very scarce since a credit report is a primary manual to establishing financial credibility. Stay optimistic – with a little determination, you can find some excellent options. Luckily, online resources cut the trouble by providing listings for areas around you. Craigslist is an incredible place to start, as it indicates whether or not properties require a credit check.
However, this route comes with risks, creating gaps for scammers in the housing market. Credible property management observes specified protocols before accepting applications, and as cumbersome as the process may sound, it is certainly necessary. Protect yourself by performing due diligence on your landlord before signing any lease agreements. Also, ensure to read through the document carefully to confirm that it makes sense for your and any other party involved.
Note that no credit checks do not mean automatic approval. You may need to provide proof of income and support your application through the tips mentioned earlier.
Bottom Line
These remedies may not guarantee a successful rental application. Therefore, it is essential to complement the efforts by addressing the source of the problem – your credit score. Working on your credit may take anywhere between a month to years. Thus, you must be patient. As you improve your credit history, submit your rental applications severally until one is approved. Alternatively, you can wait before applying and focus on improving your financial situation until your report is strong enough to prove your credibility.