How to Get an Apartment with Bad Credit
Even if you have bad credit, you’ll need to go above and beyond the typical candidate to get a rental apartment. However, you can position yourself as a solid rental applicant by following specific steps.
Before we can discuss these steps, first, you should be aware of which credit score landlords will be looking for and why.
What is the credit score you need to get an apartment?
As with creditors and banks, look at their credit score to assess the likelihood of you being able to pay your bills in time.
A prospective landlord will utilize the credit score to determine the risk you are—the more impressive your score, the lower the risk profile of your tenant and vice versa.
A FICO score in the range of 620 can count as to be fair credit and is usually the first step for landlords.
Landlords and property managers are permitted to check your credit and can refuse your application based on the score. In most cases, however, your credit score is only an indication of your credit score. What’s more important is the information in your credit report and the way you came up with the credit score you’ve earned.
Are you able to rent an apartment with bad credit?
The simple answer is that you can get an apartment even with bad credit. But, you must be careful about how you obtain the rental. Here’s how to present yourself as the best candidate and secure your apartment regardless of your credit.
1. You can pay more upfront
Many property owners and landlords require a security deposit and one month’s rent in advance to be able to rent the property.
If you wish to impress your prospective landlord, make sure you pay at least two months’ rent in advance or provide a more extensive security deposit.
This will provide your landlord with peace of mind and prove your commitment to rebuilding your creditworthiness.
In advance, payments will also allow you to be in front of your rental timeline. Even if you have to make an additional payment to make a deposit, depositing in advance, making your payments in line over any guarantees can help build faith with landlords. In certain situations, it could be set up to serve as a buffer if there are financial issues shortly.
2. Find a cosigner
It isn’t easy to convince an acquaintance or family member to cosign your lease; however, it could help secure an apartment.
If you know someone willing to sign, be sure they’ve got excellent credit and a track record of making timely rental or mortgage payments.
Make sure that the cosigner is aware of what they are signing up for; if you fall behind on the rental agreement, the two of you will be held accountable.
Since cosigning can be risky for the cosigner. Make sure you can be financially able to sign the rental agreement before you make any moves. Failure to keep a promise after enlisting the help cosigners could damage your credit score and your relationship with them.
3. Bring documents and references
The credit score is only one aspect of the whole that composes your profile. If your score is not great, be sure to include your application documents that reveal the whole story and prove that you’re a reliable applicant who can pay rent each month. The following is what you need to include:
- Evidence of a creditable rental background. Bring copies of any payments you made to your previous rental in the event of a dispute. The previous landlord might be unable to report your rent in your credit bureaus. The bank statements prove that you’ve made your payments.
- Reference letters. Request letters of reference from former landlords and property management companies, roommates, or employers. Acquaintances. Check that your reference letters come from reliable sources Letters from a relative or friend who has never worked alongside you and receiving payment from you will not help your case.
- Paystubs are evidence of employment. The landlord is likely to require proof of work. Make sure to show pay stubs for more than one or two weeks to prove that you have a steady income.
- Payments for utility bills. Evidence that you’ve made your utility payments punctually each month shows that you’re reliable, trustworthy, and constant.
Bring documents to the interview with your landlord; you will be able to fill in the gaps on your credit report or even balance your credit score if it doesn’t accurately reflect your credit background.
4. Find apartments that don’t need a credit check
The majority of established property owners need a credit test before renting to you. Some landlords do not need a credit check. These are typically not as desirable, but they could demonstrate that you’re able to pay rent while you’re also building up your credit.
For a home that does not need a credit assessment, start by looking for apartments through Craigslist, Facebook Marketplace, or the classified ads in local newspapers.
If you’re patient enough and perform thorough searches, it should be possible to locate a property that doesn’t require a credit score doesn’t have to be part of the process to determine eligibility.
5. Take into consideration a roommate
If you’re looking to lease an apartment but have bad credit, a landlord could be more inclined to consider your application if you split the rent with roommates or a few. Make sure that a landlord checks the roommate’s credit report before approving the application.
Another alternative is to live with someone already living within an apartment or a property available for rental. You may need to go through a credit test.
However, your monthly expenses will be lower, and your roommate will be responsible for the property. The only thing you have to do is pay them, and they will pay the landlord.
As with a cosigner, this arrangement is built upon the assumption that you’ll be able to make all payments punctually. Before you sign an agreement to sublet, you should review your lease agreement to confirm that it’s permissible.
6. Adjust Your Expectations
The apartment you’d like to live in and the one you are eligible for could be different. The one you qualify for might not come with an exercise room, pool or cable included. It might even be located situated on the less desirable side of town or need a longer commute.
If you adjust your expectations and referring to this as a “rebuilding” experience by changing your expectations, you’ll allow yourself the time to build your credit. In addition that you pay less for a smaller area, or having fewer amenities will allow you to keep that money in your wallet.
What are the things that landlords will look for on the Credit Report?
Although you’re doing everything you can to convince prospective landlords that you’re an appropriate candidate, however, you should be aware of the information they’re checking in the credit report.
Even if you’ve tried the above strategies and obtained an apartment for rent, It’s crucial to figure out methods to help make the next rental experience more enjoyable while improving your credit.
Understanding what a landlord might be seeking in the credit report and what they are looking for is a crucial first step.
- History of payments: Creditors will report your payment history each month. The landlord will be able to look through the details of your credit report to monitor your habits with payments and decide whether they can expect that your rent payments are in total each month.
- Rental history: If your previous landlords reported your information regarding payments to credit bureaus, your landlord would be able to look over your rental history in its entirety. They’ll also determine whether you’re in arrears with dues, evictions, or unpaid rent to a previous landlord. These are all red flags that you’ll want to pay them immediately.
- Indebtedness: A high number of credit loans, cards, medical bills, and tax bills that are not paid are warning signs for property managers and landlords. If your payment history is not consistent or if your rental history puts doubt on your capability to deliver in time and on time, too many debts put into doubt your ability to pay rent payments every month.
- Status of bankruptcy: Bankruptcies may remain visible on the credit report for as long as ten years. The landlords will often look over bankruptcy cases to determine if previous landlords incurred the canceled loans. If your bankruptcy has been dismissed, you’re less risky to landlords than those experiencing bankruptcy.
Your rental history, payment history, bankruptcy, and debt condition are vital aspects of your profile.
Rental companies and landlords will consider all of these aspects to determine if a tenant-landlord relationship is appropriate.
Therefore, before you apply, you must take the appropriate steps to enhance your credit and increase your chances of being approved. Here’s how you can do it.
How to Improve your Credit Score before obtaining an apartment
If you’re looking to lease an apartment but have bad credit and have a couple of months left, focus on improving your credit score. If renting an apartment is your goal, then these are the most crucial actions to take in the months before applying.
Make sure you pay all your due bills in time. Your payment history is the primary element in how you score your credit score, therefore paying all your bills each month on time can help improve your score and establish a solid credit history. Landlords and creditors want to see regular payment over a long period.
Make sure you pay off your debts. Are you in credit card debt? Do you have the old loan from a student? If you’re in a position to pay it off before you decide to buy an apartment, concentrate on reducing your debt. Paying down debt could increase your credit score.
If you’re thinking of renting an apartment despite having bad credit, consider getting a complimentary credit report from Experian to spot red flags before applying, and then work on improving your credit over the long haul.