Landlords will often check credit reports before renting. A bad credit history can hold you back from having an apartment rental application approved. Even if you can afford the rent, a landlord might reject your application if you don’t meet their minimum credit standards. However, if you don’t have good credit, your situation is not hopeless. There are several things you can do to prove that you would make a good tenant in spite of your poor credit score.
Here is how to rent an apartment with bad credit in seven steps:
1. Find ‘No Credit Check’ Apartment Listings
Review websites such as ApartmentsBadCredit.com and RentBuyQuick.com which specialize in apartments that don’t check credit. Keep an eye out for “no credit check” apartments in other rental listings. If you don’t find one, then ask the landlord if they might agree to forgo a credit check and rely on a good background check, proof of income and strong references from prior landlords.
2. Get Letters of Recommendation
If you were a good tenant who paid your rent on time, did not damage property, and maintained a positive record with your current and prior landlords, ask for written recommendations. Submit these letters with your application. A prospective landlord might take these positive recommendations into account and overlook your bad credit.
Related: The Cheapest Places to Rent
3. Clean Up Your Credit Reports
Fix errors on your credit reports. First, get your reports from the three major credit bureaus, Experian, TransUnion, and Equifax. You can get one free copy from each of the bureaus annually at AnnualCreditReport.com.
The reports include instructions for disputing errors. Be sure to fix your reports well before you begin an apartment search because it might take some time. Pay special attention to late rent payments or problems with past landlords, which can show up on your report, according to the Consumer Financial Protection Bureau.
You can address any remaining negative items on your reports with your prospective landlord. For instance, explain that you had emergency medical bills or went through a layoff.
4. Find a Co-Signer
Another way you can rent an apartment with bad credit is to find a co-signer. A landlord might approve your rental if you have a co-signer or guarantor with good credit. Ask a family member or close friend with good credit to sign the lease. Keep in mind they are accepting a legal liability to pay your rent in case you don’t pay it, so think it through. Alternatively, consider using a lease guarantor service.
Related: How to Build Credit With a Co-Signer
5. Pay a Larger Initial Deposit or Prepay Rent
Offering to pay a larger security deposit or paying rent in advance demonstrates to the landlord that you are serious about making a commitment to stay and pay. This ensures the landlord would have cash on hand if you left or it became necessary to evict you. It also shows you are serious about avoiding that predicament.
Also, offering to prepay rent shows a good-faith effort. A landlord would probably prefer a larger deposit first, so you might offer to prepay three months rent in addition. If it lands you a good apartment and keeps you independent, it might be worth a temporary financial hardship.
6. Prove You Can Afford the Rent
A landlord’s chief concern is that you can pay rent. There likely is a mortgage on the property that needs to be paid. A landlord might be more willing to rent to you if you include pay stubs, electronic deposit records or other written evidence of income for the past two years that shows your ability to pay the rent.
7. Check Other Specialized Reports
In addition to credit reports, there are other specialized reports landlords can obtain. The CFPB provides a list of specialty consumer reporting companies, that might be used by landlords for tenant screening. Such reports might include criminal history and evictions. Follow the CFPB instructions to obtain your reports so you can fix them if necessary before applying for an apartment.
TransUnion also offers a rental background check tool called SmartMove for landlords and renters. It also has a resident score feature that factors in your credit history.
Figuring out how to get an apartment with bad credit can be a challenge. Potential landlords are taking a risk that you will be a reliable and responsible tenant. If you can provide a combination of proof of income, letters of recommendation, a larger security deposit and prepaid rent, you can increase your chances of being approved.