When assessing your tenant application, property managers and landlords will run your credit to check your credit score. This usually means that bad credit can stand in the way of you getting an apartment. However, it is possible to secure a good apartment with bad credit if you put in the work and turn in a better application than other candidates.
Learning how to get an apartment with bad credit begins with understanding what the landlord looks for in a credit score and how to ‘fix’ bad credit. This article should help you do that.
What Credit Score Do You Need to Rent an Apartment?
Landlords check your credit record to gauge your ability to pay rent on time and, in effect, determine the level of risk you present. If you have a high credit score, your application is more likely to get approved because you have a low-risk profile. The opposite is true for bad credit scores. But what exactly is good credit? Most landlords consider a FICO Score of 620 fair credit and anything above it as good, which means a credit score lower than this might be considered bad credit.
How to Rent an Apartment with Bad Credit
As established, it is possible to secure an apartment with bad credit if you present a strong application. This generally means drawing focus to your other positive tenant-related qualities that are not reflected in your credit report. Here are some suggestions:
1. Pay a Higher Security Deposit
The security deposit is a good opportunity to convince the landlord that you can pay rent on time, despite your credit score. Rather than pay the required amount, offer a larger payment. This will not only prove your commitment; it will also put you in the clear if money becomes a problem in the future.
2. Submit More Application Documents
Since your credit score is low, your credit report should not be the focus of your application. Instead, present other documents that tell a different (and truthful) story about your credibility as a candidate and ability to pay rent on time. Some documents you can bring include:
- A letter of recommendation from a previous property manager, landlord, employer, or supervisor who can vouch for your creditworthiness. Make sure you only ask for reference letters from credible sources who can speak with authority about your income and trustworthiness.
- Utility payment receipts from previous years to show that you pay your bills on time every month and can be expected to be as consistent with your rent.
- Rental history in the form of rent payment receipts and bank statements to prove that you paid your rent on time and are dependable.
- Proof of employment such as a letter from your employer or pay stubs to prove that you have a steady income and can afford your rent.
3. Consider a Cosigner
Cosigning carries its risks but can really help improve your chances of getting a good apartment. Consider asking someone close to you such as a friend or family member to cosign your rental agreement. If they have good credit and have a history of paying rent and mortgages on time, the landlord will be more inclined to rent to you.
Note: Always ensure your cosigner understands the risk associated with cosigning. If you default on your rent, they will be held liable to pay it.
4. Find a Roommate
If your credit is too low to allow you to get a good apartment, you may consider moving in with someone already living in a rental property. While the landlord might still run your credit, the major responsibility will remain with your roommate, and you may qualify to make lower payments.
5. Apply for Apartments That Don’t Check Your Credit
Another viable option for how to get an apartment with bad credit is to look for an apartment or rental property that doesn’t consider your credit score when processing your application. You can begin your search on Facebook Marketplace, Craigslist, and local classifieds. With time and persistence, you will find a good enough apartment that won’t check your credit.
6. Adjust Your Preferences
Despite all these tips, the truth of the matter is that your credit score remains a consideration for renting property. This means you are unlikely to land a high-end apartment with a heated pool and personal parking. As such, it is advisable to adjust your expectations and go for a reasonable apartment. You can use the time of paying low rent to work on your credit so you can live in your dream home
What Landlords Look for on a Credit Report?
Landlords are allowed to check your credit to determine whether you will pay rent on time or will present a risk. By understanding what a landlord will be looking for, you can better prepare yourself for application. Here is a breakdown:
- Rental history – A landlord will also check to see if past landlords have listed any evictions, unpaid rent, or outstanding debts with credit bureaus.
- Payment history – Your credit report lists your payment habits, which can inform the landlord if you will be paying rent on time.
- Debt – To determine your payment ability, a landlord will want to know if you have any outstanding loans, tax payments, or credit card debts.
- Bankruptcy – When you file for bankruptcy, a record is added to your credit report that can remain there for up to 10 years. A landlord will want to see if the debts that led to you filing bankruptcy included unpaid rent.
How to Improve Your Credit Score for Renting an Apartment
If you have a few months before you need to apply for a new apartment, you can work on improving your credit score by doing the following:
- Clearing your debts – Reducing your debts can help improve your credit score, raising your chances of getting a good apartment.
- Making timely bill payments – If you pay your monthly bills on time, you can improve your payment history, which will raise your credit score.
Now that you understand how to get an apartment with bad credit, you need to be ready to work toward implementing these tips. It will not be easy to find a landlord who is willing to look beyond your credit score, but with persistence, you will. Remember to put your best foot forward by presenting documents that prove your dependability and creditworthiness.