With Bad Credit You May be Unable to Rent an Apartment | One Smart Dollar (2024)

FAQs

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.

Yes, renting an apartment with a 500 or below credit score is possible. However, you might not get the apartment of your dreams until that score improves. Fortunately, you can still get a decent apartment if you provide strong proof of income, get a co-signer, or rent on a month-to-month basis.

When you submit an application for an apartment rental, most landlords and property management companies will run a credit check to get a sense of your financial history and habits. If you have bad credit, this could result in a rejection for the apartment or a more expensive security deposit.

Be honest (and communicate well) about your bad credit.

Be upfront with potential landlords. Write a letter of explanation detailing why your credit score is not very good. Include how you now have good budgeting habits and about your plans to be a responsible tenant.

Credit-scoring company FICO® says that a score above 670 is a positive indicator. And that anything below might make your landlord “take a closer look at your credit details.” Tenant background checks might also be referred to as resident screening reports or tenant screening reports.

On the FICO^® Score^☉ 8 scale of 300 to 850, one of the credit scores lenders most frequently use, a bad credit score is one below 670. More specifically, a score between 580 and 669 is considered fair, and one between 300 and 579 is poor. The table below offers more detail on where scores fall.

A bad credit score falls between 300 and 579.

The lowest credit score to rent an apartment depends on the landlord or property manager. Still, typically, tenants with a credit score above 620 have a better chance of renting an apartment in the US.

However, a good rule of thumb is that most landlords look for a credit score of at least 600.

Here are some common reasons rental applications are denied: Inadequate or incorrect income. Credit history. Something in the background check.

Do apartments really care about credit score? ›

The three major credit bureaus

Next, most landlords will look at credit scores from more than one of the major credit bureaus. This way they can get an average credit score and make sure your credit is within a range they're comfortable with for potential tenants. There are three major credit bureaus: Equifax.

Your property manager may send unpaid rent to a debt collector, and collection accounts seriously damage credit scores. That's a huge reason you want to prioritize paying rent on time. An eviction won't show up on your credit reports, though it could appear on tenant-specific consumer reports.

Unless you live in one of the few jurisdictions which has a law protecting you from discrimination based upon your credit score, a landlord can reject your application for poor credit.

A letter explaining bad credit should be honest and transparent. Acknowledge your financial situation, and explain any extenuating circ*mstances that may have contributed to it. Honesty is critical since any lies or omissions will inevitably come to light and could jeopardize your job prospects.

Use savings to pay for several months of rent upfront. This might convince the landlord or property manager that you are serious about your commitment. Provide a written explanation for any negative marks. A landlord may overlook isolated credit missteps that can be explained, such as those due to job loss.

Most landlords seek credit scores of 650 or higher as a sign of tenant responsibility. Applicants with scores below 600 may face additional hurdles in securing approval. Exact minimum thresholds vary widely depending on factors like the type of apartment, current occupancy rates, and the landlord's discretion.

From 740 to 799 is considered very good, and from 580 to 669 is regarded as a fair score. The credit score required to get approval for a rental application varies depending on the landlord or property management company. However, most landlords want applicants with a score of around 625 or higher.

According to a report from Experian®, the average FICO credit score in America was 714 in 2022. So 600 falls below that national average. On the VantageScore range, the company says 600 scores are considered poor. But the company says fair credit scores start at 601.

A FICO^® Score of 650 places you within a population of consumers whose credit may be seen as Fair. Your 650 FICO^® Score is lower than the average U.S. credit score. Statistically speaking, 28% of consumers with credit scores in the Fair range are likely to become seriously delinquent in the future.