I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.See all posts Frank Gogol
Can You Rent an Apartment With Bad Credit? Yes, Here’s How
Renting an apartment can be challenging, especially in areas with a competitive housing market and high rent. Many landlords require renters to have a good credit history to show that they will keep up with rent payments. In these situations, you may wonder how you can get an apartment with bad credit (similar to trying to rent an apartment without credit). Read on to learn more about your options.
Can You Rent an Apartment With Bad Credit?
The simple answer is yes. You can rent an apartment even if you have bad credit, but you may need to do some extra work to convince the landlord to accept you as a tenant.
Another option is to look for apartment rentals that do not require a credit check at all. In this way, you can avoid the question of good or bad credit entirely.
What Credit Score Is Required to Rent an Apartment?
The necessary credit score varies depending on the property and the landlord. While many landlords favor tenants with a credit score of 620 or above, some may have higher standards, and others may not consider your credit score as a determining factor. It’s always beneficial to check specific rental company guidelines or inquire directly with the landlord.
How to Get an Apartment with Bad Credit: 8 Ways
Securing an apartment with a less-than-stellar credit score is not impossible. By employing the following strategies, you can enhance your prospects during the rental application process:
1. Advance Payment Strategy
Consider offering a larger initial payment. Most landlords ask for a security deposit or the first and last month’s rent. To demonstrate commitment, consider paying the first three months’ rent or increasing the security deposit. This not only provides assurance to the landlord but also eases your monthly financial obligations for a while.
2. Rely on a Guarantor or Cosigner
Enlisting the help of someone with a strong credit history can alleviate landlords’ concerns.
- Cosigners: They commit to meeting the financial obligations if you default. They co-sign the lease, sharing the monetary responsibilities.
- Guarantors: Similar to cosigners, they promise to cover missed payments but don’t enjoy the same tenancy rights, meaning they can’t live in the apartment.
3. Present Additional Documentation
Your financial health isn’t solely defined by your credit score. Offer alternative documents to demonstrate your monetary responsibility:
- Payslips: Display your consistent income, indicating your ability to cover rent.
- Recommendation Letters: Character references, especially from past landlords or employers, can vouch for your reliability.
- Stable Rental History: Bank statements or commendations from previous landlords can corroborate a history of punctual rent payments.
- Savings Overview: Displaying a healthy savings balance can provide assurance. Ensure personal details are masked.
- Utility Bill Records: Consistent utility payments can further highlight your financial dependability.
4. Explore No Credit Check Apartments
Some landlords forgo credit checks. These properties might be more affordable and less competitive. Also, some listings might emphasize lenient credit prerequisites. Such dwellings can serve as a stepping stone, allowing you to gradually bolster your credit score.
5. Reevaluate Your Apartment Wishlist
Being flexible with your apartment preferences can widen your options:
- Opt for locations that might be a bit further from city centers or workplace.
- Prioritize essential amenities and be willing to forgo luxuries like a gym or pool.
- Consider properties without dedicated parking spots.
- Be open to smaller spaces than initially desired.
- Contemplate teaming up with a roommate to share costs.
Remember, securing an apartment with poor credit is about showcasing financial responsibility and reliability. Even if you settle for an apartment that’s not your first choice, use the opportunity to save, improve your credit, and better position yourself for future rentals.
6. Explore Rental Options That Don’t Require a Credit Check
Checking your credit history is not something that landlords have to do by law—it’s something they choose to do. You could find a landlord who simply doesn’t do credit checks. In that situation, it wouldn’t matter whether you have a good or a bad credit score.
However, in those cases, the landlord may have some other requirement instead—such as paying one or more months of rent upfront—which may be impractical for you.
7. Find a Roommate to Rent With
One final option you can try is to share the cost of rent with someone else. By having a roommate live in the apartment with you and paying a share of the rent, you can convince the landlord that the financial burden on each of you is much smaller, meaning you are much less likely to fall behind on rent.
One advantage of this is that you can greatly decrease the amount of rent you have to pay each month by sharing the cost with a roommate.
However, living with another person presents a lot of additional challenges that come with sharing a living space. Keep in mind that it is a major change from living alone.
8. Offer to Pay an Extra Month’s Rent Upfront
From a landlord’s perspective, the main risk they take is that you will fail to pay your rent and fall behind. This means they in turn fall behind on expenses associated with the apartment.
If you have a bad credit score, landlords take it to mean that you have missed payments before, and thus are likely to do it again.
One of the ways you can convince a landlord to overlook this is by managing the risk on their side by offering to pay an extra month upfront. Then, if you ever run into trouble and miss your rent one month, the landlord already has that money, and you will not be behind on your rent.
This is quite an expensive way to go about it, but it can help convince a landlord that you are serious, and also that you have enough cash to be able to cover rent without problems. If you don’t have the cash to do this upfront, you can always look at loans for apartments.
What Do Landlords Look for On Credit Reports?
A credit report offers more insights than just a credit score for potential renters. It paints a picture of your financial behavior over time. When landlords conduct a credit check for prospective tenants, they typically focus on:
- Rental History: This can capture records of evictions, breaches of lease agreements, and patterns of late or defaulted payments. Some landlords might report these to credit agencies.
- Employment History: Although not a primary feature, past or present employers might appear on the report, especially if they were referenced in credit or loan applications.
- Payment Track Record: This section highlights your punctuality in settling bills. Consistently late or missed payments could dent your chances of securing a rental agreement.
- Outstanding Debts: Both current and previous debts are listed, enabling landlords to determine your debt-to-income ratio using your provided payslips. Demonstrating the capability to manage and repay debts boosts your application’s strength.
- Delinquency and Collections: An account turns delinquent with missed due dates, and if the negligence persists, it might be handed over to a collections agency or sold off. Both scenarios are detrimental to your credit standing.
- Bankruptcy Details: While a bankruptcy filing does impact your credit, landlords may perceive recent filings as indicators of potential rental risks.
- Derogatory Remarks: Negative markers like car repossessions or home foreclosures can adversely affect your application, as they indicate financial irresponsibility.
Ultimately, landlords are assessing the financial risks associated with a potential tenant. An applicant boasting a high income but with a trail of missed payments might not be deemed trustworthy. Conversely, someone who experienced bankruptcy years prior but has since exhibited fiscal responsibility might still be favorably considered.
10 Expert Tips to Improve Your Credit Score Before Renting
For many renters, the challenge of navigating the rental market with bad credit can seem daunting. One question that frequently arises is: “How can I boost my credit score, especially as a renter with bad credit?”
To answer this question, we sat down with our resident financial expert, Rohit Mittal. Based on Rohit’s extensive experience and deep understanding of financial intricacies, he’s outlined some comprehensive insights for you:
1. Timely Bill Payments
The foundation of a good credit score lies in timely bill payments. A consistent history can account for about 35% of your FICO score. Use tools, apps, or even old-school reminders to never miss a deadline.
2. Decrease Your Debt
Reducing your debt doesn’t just lighten your financial load, it also boosts your credit. Your credit utilization rate (the percentage of your available credit that you’re using) has a significant impact. Prioritize paying down high-interest debts first.
3. Credit Builder Loans
These unique loans are a lifesaver for those looking to establish credit. You’ll essentially “loan” money to yourself, and as you repay it, your good payment behavior is reported to the credit bureaus. At Stilt, we’ve observed some amazing success stories through this method.
4. Become an Authorized User
Having a trusted individual with stellar credit add you as an authorized user can be a strategic move. You’ll benefit from their good credit habits without the responsibility of handling their account. It’s a mutual trust journey, so cherish it.
5. Avoid New Debt
It’s tempting to open new lines of credit, but remember, every time you apply, there’s a hard inquiry on your report. These can add up and pull down your score. Stick to necessary credit and practice restraint.
6. Dispute Errors
Human errors happen. Regularly review your credit reports from all three bureaus. If you find discrepancies, contest them immediately. It’s your right to have an accurate representation of your financial history.
7. Secured Credit Cards
These cards require a refundable deposit, which usually determines your credit limit. Over time, with responsible usage and consistent payments, you can transition to a regular credit card, thus further enhancing your credit journey.
8. Seek Financial Counseling
There’s no harm in seeking guidance. Many non-profit organizations offer expert advice tailored to your needs. They can provide resources, workshops, and individual counseling sessions that can be transformative.
9. Rental Payments Reporting
Not everyone knows this, but some services can report your rental payments to credit bureaus. It’s a way to have your consistent rental payments work in your favor.
10. Stay Informed
Dive deep into understanding credit. The nuances, the terms, the strategies. With platforms like Stilt, we aim to demystify finance for everyone. Grab a book, join a webinar, or even chat with experts.
The path to better credit isn’t a sprint, but a marathon. With patience, a clear strategy, and a touch of perseverance, you’ll witness tangible improvements. I saw it countless times at Stilt, and I firmly believe that everyone has the power to redefine their financial narrative.
- How To Get Out of a Lease
- How Much Renters Insurance Do I Need?
- What Credit Score Do You Need to Rent an Apartment?
When answering the question of can you get an apartment with bad credit, it is important to understand all your options. Firstly, some rental situations do not require a credit check at all. Otherwise, you can get help from someone else—either a cosigner or roommate—or offer to pay an extra month upfront. If you do not need housing urgently, you can also spend some time improving your credit score before you rent. And if you’re struggling to repair your credit score, check out Credit Saint. If they’re credit specialists can’t help you, they offer a 90-day money-back-guarantee.
Renting an Apartment With Bad Credit FAQ
Below are some common questions about renting an apartment with bad credit and their answers.
Can you get an apartment with a credit score of 500?
While a credit score of 500 is considered low, it is still possible to secure an apartment. However, landlords might request additional assurances such as a larger security deposit, a guarantor or cosigner, or upfront payment of multiple months’ rent.
What is the lowest credit score to rent an apartment?
There isn’t a universally set “lowest” credit score to rent an apartment, as leasing criteria can vary from one landlord or property management company to another. Some landlords might have more lenient requirements, especially in less competitive rental markets or if other aspects of your application are strong, such as a steady income.
How bad does your credit have to be to not get an apartment?
There’s no specific threshold that guarantees a denial. However, severe negative marks like recent bankruptcies, evictions, or numerous unpaid debts can significantly hamper your chances. Each landlord has their own criteria, so it’s always a good idea to discuss your situation upfront or seek properties with more lenient credit requirements.
What does your credit score have to be to get into an apartment?
While there’s no universally agreed-upon minimum credit score, many landlords prefer tenants to have a score of 620 or higher, as it is commonly seen as the threshold for “good” credit. However, it’s essential to remember that landlords consider other factors in addition to the credit score, such as rental history, income, and references.