How to rent an apartment with bad credit (2024)

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• Renting an apartment with bad credit is possible, however, a low credit score will present challenges.
• It's important to show stable income and you might even need a co-signer or roommate.
• Take the time to work on improving your credit by paying all bills on time and reducing debt.

Whether you have started your first job in a new city with no credit or you got into some credit card debt when you were young, low credit scores happen. Unfortunately, having less-than-stellar credit may make it more difficult to get the keys to an apartment if you live in a city where credit scores are part of the rental equation.

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.

Understanding your credit score

What is a credit score?

Credit scores are a representation of your credit reports and payment history. Credit reports contain information on how you pay your bills compiled by the three credit bureaus — Experian, Equifax, and TransUnion.

Know your credit score before you fill out an application for an apartment. If you have late payments due to a job loss or illness, you maybe able to explain this to a potential landlord. To check your credit score for free, use Credit Karma, Credit Sesame, Credit.com, or FreeCreditReport.com.

How does bad credit affect apartment rentals?

When reviewing rental applications, landlords use credit to assess an applicant's ability to pay rent. Your credit report will provide information on your financial situation and if you have bad credit or a low credit score and a history of paying bills late, a potential landlord may think that you will not pay your rent on time either.

A landlord who ends up with a non-paying tenant has to go through a lengthy and expensive legal process to remove the tenant so the preference is to get it right on the front end, by doing a credit check.

Strategies for renting with bad credit

Offering a larger deposit

Just because you have less-than-perfect credit doesn't mean you'll automatically be denied an apartment. You should just be prepared to (or offer to, if you really want the place) pay a little more up front by way of an increased security deposit or a few months' rent ahead of time to ease any of the landlord's concerns.

Finding a cosigner or guarantor

Some cities require a cosigner for apartments if you don't make above a certain income based on the monthly rent charged. But even if your apartment doesn't require it, getting a cosigner could be the answer to your apartment problems.

A cosigner signs a legal document stating that if you miss a payment, they will be liable to make those payments in your place. This means that any cosigner you get should be someone you trust, and who trusts you, since their credit could be negatively impacted by any mistakes you make with your rent.

Showing proof of steady income

Showing up prepared is a great way to impress upon landlords that you are serious about your rental application, even if you don't quite have the credit to back it up.

It might also help to prove that you're responsible in other areas of your personal finance, even if you haven't managed to acquire an enviable credit score just yet. For example, if you have enough money in an emergency fund to cover a couple months' worth of rent, be sure to bring those statements as back-up to prove you have the means to pay.

Providing references from previous landlords

Bring some recent financial documents to prove your income for the past few months — especially if you make a good salary — and consider getting some letters of recommendation as well. If you can get letters from a previous landlord stating that you were reliable and dependable, that could work wonders.

Sign a lease with someone else

This requires a bit of trust, but if you would be okay with getting an apartment with a roommate — and you can find someone who wants to live with you — you could have the application run with your roommate's credit score, then you could make your rent payments directly to him or her. This won't work in every situation, though, since some landlords require all occupants to be on the lease.

How to improve your credit score for future rentals

Paying bills on time

35% of your credit score is your payment history. How you pay your bills and if you pay your bills on time plays a huge part in your credit score. When a potential landlord pulls your credit report, they're essentially looking to get a sense of your payment history. There is a strong correlation between an ability to pay your bills on your time and paying your rent on time.

Reduce debt

It is also important to reduce your debt and the balances you are carrying on credit cards. Credit utilization is also a part of your credit score. Your credit utilization is the is percentage of available credit that is in use. The lower your utilization, the better your score. Lower credit utilization also shows that you are using credit responsibly and that you are not overextended.

Disputing credit report errors

When you're trying to get approved for an apartment, some of the items on your credit report that can pose a threat to your plans might surprise you. It makes sense to gather all three credit reports and see if there are any errors and file a credit report dispute to get them removed.

If you catch an error on your credit report, you should explain in writing what you think is wrong, why, and include any supporting documentation. For example, if you see a late payment on your report that you think is wrong, dispute the late payment in writing, and include the proof that you made the payment on time, such as a bank statement showing when the payment was made or the payment receipt.

Navigating the application process

Preparing your rental application

If you don't have the strongest credit score, preparing the strongest rental application will be crucial to increasing your chances of being approved for an apartment. This is where you want your employment and income to really shine. If you have a great career and employment history, be sure to highlight that and get a reference from your employer if possible.

If your income has been steady and/or exceeds the amount needed to pay the rent, highlight that on your application. Include bank statements, tax returns, and even pay stubs to signal to the potential landlord that you can comfortably pay the rent.

What to expect during the credit check

Your landlord will typically pull one of your credit reports (Experian, Equifax or TransUnion), call your references, review your bank statements, and verify employment. Also, you may have to pay a deposit for the landlord to take the apartment off the market. If your application is denied, you get the deposit back and if approved, it can be used towards your full security deposit or first month's rent.

Even if you don't have the best credit score right now, it is still possible to rent an apartment. Just really work on putting together a strong rental application indicating other points that make you a good rental candidate. Also, instead of trying to rent an apartment in a large building that works with a leasing company, you may want to look at smaller buildings where it would be possible to speak to the landlord, who may have more flexibility.

If, at the end of the day, you don't want to do any of the above, you could always wait to find the apartment of your dreams until you're able to raise your score. There are plenty of ways to go about raising your score, including paying down debts, keeping your credit-card balances low, and becoming an authorized user on someone else's account.

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