The following is presented for informational purposes only and is not intended as credit repair.
Finding a rental like a new apartment or house is stressful enough in the best of circ*mstances, but if you have bad credit, things can get pretty difficult. That’s because many landlords and property management firms require a credit check as part of the application process. And depending on your score and the requirements for the property, that poor credit pull may lead to your application being denied.
Why Do Landlords Care About Your Credit?
It’s probably helpful to understand why landlords are looking at your credit report at all. After all, they aren’t loaning you money, so why do they care about your creditworthiness?
In truth, however, your landlord is lending you something of value – the rental property itself. And just as banks and credit unions weigh the risk and reward of lending you money, property managers do the same thing before handing over the keys.
So while your credit report and, more specifically, your credit score can’t tell a landlord exactly how you’ll behave as a tenant, they can tell a prospective property manager how you’ve handled other financial responsibilities. A bad credit score can be interpreted as you having a hard time staying current on previous debts and bills. If a landlord or property management firm is trying to minimize the risk of having tenants who fall behind on rent (or worse, ultimately require an eviction) they’ll likely see your credit score as a strong indicator of what to expect over the course of the lease.
So it helps (a lot) to have strong credit score. And while it would be great if you could just fix your credit overnight, improving your score takes time – time you probably won’t have if you’re looking for new housing. So what can you do if your credit score is low but you need to find a new apartment? Here are some steps to take if you’re trying to rent an apartment with bad credit.
Explain Why You Have Bad Credit to the Rental Property
There are a lot of reasons why your credit score can dipand you being irresponsible with money doesn’t have to be one of them. If you feel comfortable explaining the circ*mstances behind your poor credit score, go ahead and share that with the property manager. Landlords are more interested in your recent history, so if your low score is the result of something that happened years prior be sure to discuss that and share what you’ve been doing to improve your score and fulfill your responsibilities since then.
Offer References from Prior Landlords
You can have a poor credit score and a spotless rental history, which is why it may be helpful to provide documentation from previous landlords. If you can show that you have a history of making your rent payments on time (in addition to all the other behaviors that make you a good tenant) then a poor credit score may not be as big of a deterrent.
Be Willing to Pay More Up Front
A security deposit is one way that landlords offset the risk of renting out their property. Should something happen, they can use those funds to cover any cleaning or repairs above and beyond what’s covered in the rental agreement.
The higher the risk, the more you may need to pay up front to mitigate that risk. This could be a larger than usual security deposit, or possibly even upfront rent payments for one or more months. Whatever you agree to, however, make sure it’s captured in the lease and you understand how that money will be used and how you can get it back (if applicable). You should also consider your financial capacity – while you’re likely under pressure to find an apartment, try not to overextend yourself. If the required deposit puts you in a dangerous position, keep looking.
Add a Co-Signer
As a last ditch option, you can try to add a co-signer. The co-signer wouldn’t need to live at the property, but they would be equally responsible should you fail to meet your obligation. In other words, if you miss payments, the property manager could go after the co-signer for the back payments.
Co-signing can put both parties in an awkward position, though, so be sure that you and the co-signer are comfortable with the arrangement and understand what’s expected.
Finding an apartment with a bad credit score is far from impossible, but it's harder than the alternative. If you’re not planning on moving any time soon, now’s the ideal time to start working on your credit score. If we have tons of great articles on building a positive credit history, but if you’re interested in one-on-one help with your credit, consider working with a trained counselor to review your credit reportand create a plan for long-term credit success.
FAQs
A: A 500 credit score is generally considered low for renting an apartment. This score might lead to application rejections, but understanding and addressing the reasons behind a low score can improve your renting prospects.
What is the lowest credit score to rent an apartment? ›
Credit score requirements for apartments vary by landlord, but most require at least a 670. Landlords can also view your credit report for any delinquencies or accounts in collections. If you have a low credit score, landlords may ask for upfront payments, guarantors, or references.
How to get an apartment in LA with bad credit? ›
Approaching Potential Landlords With Your Case
Communication is of utmost importance; be upfront and forthcoming about your credit history while emphasizing your assets as an applicant. Rent approval rates can be improved by offering larger security deposits, pay stubs, bank statements and cosigners as proof.
How to rent an apartment in Massachusetts with bad credit? ›
You should have pay stubs going back a year, if possible.
- Set Aside Savings to Show The Landlord. Another option when renting with bad credit or no credit is to have savings to cover a few months' rent. ...
- Write a letter to the landlord explaining why you don't have good credit. ...
- Get Help From a Co-Signer.
Information included in a landlord credit check includes payment history, the existence of a bankruptcy or accounts in collections, debts currently owed and more. Landlords also consider other information when approving tenants for a rental, including current income and history of employment.
Can you get an apartment with a 300 credit score? ›
If you have poor credit — somewhere between 300 and 579 — it's not impossible to rent an apartment, it just might take a little more work on your part.
Does applying for an apartment hurt your credit? ›
A: Most landlords will check prospective tenants' credit, and if you submit many applications, it can affect your credit score. It doesn't hurt to visit a lot of potential rentals, but be choosy about where you submit an application.
Does paying rent increase credit score? ›
Unless you or your landlord have signed up for a rent reporting service, the three major credit bureaus – Equifax, Experian and TransUnion – will not put rent payments on your credit report. That means your credit score and credit report aren't affected by your rent payments. But, Griffin says, you can change that.
Does a Zillow rental application affect credit score? ›
This is a soft pull on their credit, so credit scores won't be affected. What is a “portable” rental application? Our applications are portable, or reusable, because the renter only has to pay once but can submit an application to an unlimited number of participating landlords within a 30-day period.
What credit score do you need to rent a house in California? ›
Qualifications for All California Leasing & Management Rental Properties: The credit score must be 640 or higher on our credit report to use that applicant's income to qualify. (A credit score of under 640 will disqualify that applicant from using their income to qualify)
The cosigner is a party with an established financial history who agrees to back up one or more tenants on the lease. They function as a safety net for the landlord. If the other people named in the lease can't make rent or cause damages they can't afford to repair, the cosigner has agreed to pay instead.
Is no credit bad for an apartment? ›
While a better credit score can make it easier for your rental application to be approved, it is still possible to rent with low or no credit and establish positive financial habits to build your credit while renting.
How can I rent an apartment without a FICO score? ›
When you don't have a credit score, the prospective landlords don't have a guarantee that you'll be able to cover your rent. You can still rent, but you'll need to provide a different form of guarantee, like paying a higher security deposit or finding a co-signer to the lease who will cover the rent if you can't.
What is the minimum credit score for most apartments? ›
In general, a landlord will look for a credit score that is at least “good,” which is generally in the range of 670 to 739.
Do apartments check TransUnion or Equifax? ›
Most landlords partner with one of the three major U.S. credit bureaus: TransUnion, Experian, or Equifax.
Can I rent with a credit score of 550? ›
Wealthier, more competitive areas will require a higher minimum score, as will new or luxury buildings. However, a good rule of thumb is that most landlords look for a credit score of at least 600. Anything under 600 is considered bad credit, but don't worry – there are many ways to get around bad credit.
Do apartments care about credit scores? ›
Landlords may typically look for tenants with at least a fair or good credit score. Landlords may also use tenant screening reports, with information like rental history and employment verification, to make rental decisions.
How high does your credit score have to be to buy an apartment? ›
There isn't a standard credit score that is needed across all of California, but, generally, mortgage firms and banks prefer to see a score of 600 or higher for loans.
What is the lowest credit score? ›
The two most widely used credit scoring models, FICO and VantageScore, range from 300 to 850, making 300 the lowest credit score possible. FICO and VantageScore give high credit scores to consumers deemed as lower-risk borrowers, and lower scores to high-risk borrowers.
