So, you want to rent an apartment but you have a bad credit score.
Take comfort in knowing you’re not alone—many Americans find themselves in this position. And while a low credit score can impact your ability to make a number of financial decisions, such as leasing a new apartment, there are ways to navigate renting a home with bad credit. The ideal situation is to find an apartment that is safe and within your budget while working to slowly improve your credit score. Most landlords and property managers will require a tenant screening that involves a credit check or report.
What should you do if you have bad credit but need to find an apartment ASAP? Here are some ways to secure an apartment despite poor credit score (550-649) or bad credit (550 or below).
- Check your credit report
Experian, TransUnion, and Equifax are the three major credit bureaus. When identifying your credit score, it’s best to get credit reports from all three bureaus as landlords and property managers may use different reports to confirm your credit history. Landlords and property managers don’t just look at the score, they’ll also look for any evictions or judgements. To help your situation, try to pay off any outstanding credit card debt if possible. Once you have your credit report you can take the next steps.
- Find multiple apartment options
You may have to look a little farther away from your desired areas, but applying for a variety of apartments across multiple neighborhoods gives you better odds of finding something. No two apartment owners are the same, and their cut-off for credit score requirements may be different, along with the other factors taken into account. Finding multiple potential properties in the area where you want (or need) to live will make it possible to take advantage of the variability in landlord preferences. In the process of shopping around and finding multiple potential apartments, pay attention to online reviews of the properties. Previous tenants might mention stringent credit score requirements, or loose requirements, which will help you narrow your search.
You may consider no credit check apartments, but these apartments can be more risky as they are often associated with common rental scams. Often, landlords who provide no credit check apartments will impose extra fees, late rent fees, and won’t consider doing background checks. If your landlord isn’t checking your background, they’re probably not checking your neighbors’ either. Safety at no credit check apartments tends to be the major concern for renters, and fees are a close second. - Consider a cosigner
It may feel uncomfortable to ask a friend or family member to cosign for your rental application, but it is one good way to show a landlord that they will get the monthly rent. The more likely it is that you’ll pay rent on time, the more likely they are to approve your application. It is especially important to choose an apartment with rent that is affordable to you, since cosigning the lease made your friend or family member liable for the payments if you cannot pay them. Once you are in a position to reliably pay your rent and you are firmly on your way back to a strong credit score, you can look into removing the cosigner. This sometimes requires writing a new lease, but it’s possible when you show your landlord evidence of a new, less risky financial situation.
- Provide reference letters to your landlord
In particular, if you have a previous landlord who can speak highly of your rental history, or an employer who can applaud your dependability, use them as a rental reference and establish your good character with a potential landlord. They can also often corroborate any tough circumstances like family tragedy or medical illness that may have contributed to your bad credit. If these important figures in your life can vouch for you, landlords are less likely to be fazed by the results of a bad rental credit check. Asking for a letter of recommendation for past landlords is a great option to speak to your character as a renter.
- Show proof of stable income
Point out the monthly income you have now as opposed to the income you had when you struggled to make payments, ultimately reducing your credit score. A steady income is a great extra piece of information to share with your potential landlord or property management company to prove that you will be a tenant who takes care of the property and pays rent on time. You can use pay stubs or bank statements to show your proof of income when trying to rent an apartment with bad credit.
- Offer to pay more upfront
If you have the cash to do it, putting down a larger security deposit or paying rent in advance can be a great way to show how serious you are about an apartment. Another option within this same idea is to make an auto-draft from your checking account or a direct deposit from your paycheck to the landlord for you rent payment. This indicates how seriously you plan to pay rent first and foremost, and ensures that payment will never be late simply because you were too busy to get the check to the office or into the mail.
- Be honest and transparent about your credit score
A potential landlord will be disappointed if they discover, after the fact, that you want to rent with bad credit. The easy solution is to be honest and upfront with property managers or landlords about your financial history as soon as you apply. Let them know that you are aware of your credit and what you believe has impacted it in the past, as well as your assurance that you have made the changes necessary to begin the process of improving your credit score. By addressing these issues head-on, you gain a reputation for being honest even when it is difficult, which is a great quality in a landlord and renter relationship.
- Consider renting with a roommate
Some potential landlords and property managers will let you rent with a roommate using their credit. If you have the option to rent with a roommate who has a higher credit score, this could be a great option. If utilizing this option, remember to discuss the details with your potential landlord upfront to ensure that it’s possible to use your roommates credit report.
- Even while apartment hunting, pay those bills on time
Even though credit takes a while to recover from past issues, paying your credit card bill and other payments on time is a great way to establish a track record that improves your credit score. Being careful and organized to make sure that your budget allows for on-time payments is just as important as continuing to look for your current apartment, and will ensure that any future apartment will be easier to acquire. This may mean tightening one’s belt, selling off any items that require upkeep and aren’t needed, or giving up expensive hobbies, but if the process increases your credit, it will help in many areas of your life in the future.
Frequently asked questions about renting an apartment with bad credit
Anything above 700 is considered a good credit score. Credit scores range from 300 to 850, with anything above 800 considered “excellent” credit, and anything below 579 considered “very poor”. TransUnion, Equifax, and Experian are the three major credit bureaus that will determine your credit score.
There are many free to low cost options to check your credit score without running your credit. Credit Karma is one popular option to consider. You may also have the option to check your credit score through your online banking portal.
Your credit score is determined by a number of weighted factors including your payment history, length of open credit, credit card usage, hard inquiries or credit checks, and available credit.
Your payment history is the most important component of your credit score and the most heavily weighted. Payment history makes up about 40% of your score. To improve your credit, first make sure you are making routine payments on your debt. Schedule an automatic payment every month to ensure that your payment history is consistent. Credit history and credit usage are the next largest score factors. New accounts indicate greater risk, so having an account open for longer will benefit your score. Credit usages refers to the amount of available credit you are using. Keeping your balance under 30% of the total limit can help improve your score.
Having a high income will help when applying for an apartment with bad credit. Landlords typically require renters to earn three times more than the monthly rent amount. However, other factors are taken into consideration and having outstanding debts or delinquencies could make a landlord choose another renter over you.
No, a low credit score does not mean you will always be disqualified from renting an apartment. However, a potential landlord could ask you to make some other concessions, such as paying a larger security deposit or using a cosigner or guarantor for your lease. If you know you have bad credit you’ll want to be upfront with your potential landlord and make sure you have all of the information easily accessible. As long as you have a good rental history, steady income, and positive references, you’ll still be a great candidate as a renter.
While there is no definitive number, a credit score of 620 or higher is generally a high enough credit score to secure an apartment.
While 500 is considered a low credit score it is still possible to get an apartment. Each landlords will have different credit score guidelines, so if you have a low score, it’s best to ask for clarification upfront to determine if your score is within the requirements.
FICO scores tend to be most commonly used, but it’s at the discretion of each individual landlord or property management company.
Landlords can perform both soft and hard credit checks. Hard credit inquiries could lower your credit score, so it’s best to clarify prior to submitting your application.
Final thoughts
Those looking for apartments to rent with bad credit don’t need to feel like they are out of options. Even with low income, no cosigner, or bad credit, apartments are available that will help you move through the tough times that got you to this point and into a better spot.
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