How To Get an Apartment With Bad Credit in 7 Steps
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.
What Credit Score Do You Need To Rent an Apartment?
While a FICO credit score from 580-669 is considered fair credit, 620 is often the minimum credit score you’ll need to rent an apartment. If your score is lower than 620, it could be more difficult to rent an apartment. And if you have a credit score lower than 580, which is considered poor or bad credit, you will likely find it very difficult to rent an apartment.
How To Rent an Apartment With Bad Credit
Even if your credit has more than a few dings, don’t give up. With some diligence and perseverance, you can still succeed. Here’s how to rent an apartment with bad credit in seven steps:
1. Find ‘No Credit Check’ Apartment Listings
Look in your local classifieds or on media platforms for apartments that are listed for rent with no credit check required. Also ask friends, relatives and co-workers for their suggestions. If you don’t find an apartment with no credit check, consider asking landlords 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 made it a point to pay 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.
3. 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 that 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.
4. 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 paying more upfront lands you a good apartment and keeps you independent, it might be worth a temporary financial hardship.
5. 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.
6. Find a Roommate
Another option is to find a roommate. Look for someone who is already renting an apartment who needs a roommate, or see if you can find someone with good credit who is interested in renting an apartment and splitting the expenses with a roommate.
7. Be Willing To Settle for Less
If you have bad credit, the apartment you want and the apartment you can currently get approved for might be very different. For example, you might have to move to a part of town that you normally wouldn’t or live in an apartment that’s much smaller and with fewer amenities than you’d prefer. But doing so could help you fix your credit and maybe even save some extra money in the process due to cheaper rent.
What Do Landlords Look For in a Credit Report?
Even if you take the other steps to convince a landlord that you are worthy of renting an apartment, you may also have to agree to a credit check. Here’s what a landlord may look for on your credit report:
- Rental history: A landlord will be interested to know whether or not you’re going to pay your rent every month. If you’ve rented before, a previous landlord may have reported your payment history to the credit bureaus. If so, any late or unpaid rent or evictions will likely show up.
- Payment history: Payment history accounts for 35% of your credit score, according to myFICO, and is a good indicator of whether or not you will make your payments on time in the future. If you’ve made a habit of paying late, your potential landlord will likely be very concerned.
- How much debt you have: The amount of debt you owe, which accounts for 30% of your overall FICO score, can indicate your ability to pay future debts. If your credit report details an overload of debt, such as a variety of credit cards and loans with high balances, a landlord may be concerned about your ability to pay.
- Whether you’ve had a bankruptcy: Bankruptcies can remain on your credit report for as long as 10 years. A landlord may check to see if any amounts owed to former landlords were discharged through bankruptcy, which could be of concern.
How To Work on Your Credit Before Renting an Apartment
If you have bad credit and you don’t have to rent an apartment right away, it could benefit you to work on your credit first. Here’s how.
Fix Errors on Your Credit Reports
First, get your reports from the three major credit bureaus, Experian, TransUnion and Equifax. In general, you can get one free copy from each of the bureaus annually at AnnualCreditReport.com, but during the pandemic, free reports are available weekly.
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.
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.
Pay All of Your Bills When Due
Your payment history counts for over one-third of your overall credit score and also indicates if you are responsible about paying on time. Creditors report your payment history on a regular basis, so make sure you pay all of your bills by the due date.
Work Toward Paying Down Debts
A heavy debt load can not only reduce your credit score, but it also can make you look riskier to a potential landlord. Pay extra toward credit card debts and student loans to reduce their balances.
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’s 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.
Takeaways on Getting an Apartment With Bad Credit
Getting approved to rent an apartment often requires a credit check. If you have a credit score under 620, it could prove challenging to rent an apartment. And if you have a score that falls into the poor or bad range (below 580), it could be even more difficult.
In cases of poor or bad credit, locating a suitable apartment that you can rent without a credit check would be ideal. However, if you can’t, try to take the time to clean up your credit as much as possible before applying to rent an apartment. Then, be prepared to submit proof of income, letters of recommendation, a larger security deposit and prepaid rent to increase your chances of being approved.
David Navarro contributed to the reporting for this article.
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