- Credit scores are one of the checksproperty managers usually perform to assess whether an applicant is a reasonable risk.
- Finding a rental with low credit is more challenging but don’t give up.
- Strategies like chatting with the property manager, subletting, and submitting references can help secure a rental with low or bad credit.
Are you looking to rent an apartment but unsure of the credit score needed to do so? We’re here to help. In this article, we’ll explain the credit score requirements for renting an apartment, how credit scores are calculated, and what you can do to improve your chances of getting approved with a low credit score.
What credit score do you need to be approved for an apartment?
While credit score requirements for renting an apartment vary depending on the landlord or property management company, there are some general guidelines you can follow. Generally, a credit score of 625 or higher is considered good, while a score of 600 or lower may make it more difficult to get approved.
However, keep in mind that credit scores are not the only factor that landlords consider when reviewing rental applications. Landlords may also look at your income, rental history, and employment status. Additionally, some landlords may be willing to work with tenants who have lower credit scores if they can provide a co-signer or a larger security deposit.
Expert insights on credit scores when renting
“Nowadays property managers run the applicants credit, and basically get a green light, yellow light or red light. The green light means you pass and you’re good to go. Most often, we don’t even look at the actual scores. We just see a yellow, a green, or a red. Meaning the applicant is either denied or is approved with conditions. If someone doesn’t quite meet the qualifications, like income or credit score, they may have the opportunity to pay an additional deposit.”
Tammy Lee, Vice President – Special Services, Lincoln Property Company – Southeast
Understanding credit scores
A credit score is a numerical rating that represents your creditworthiness, or your likelihood to repay debts on time. Credit scores range from 300 to 850, with higher scores indicating better creditworthiness. Credit scores are calculated based on various factors, including:
- Payment history: Whether you’ve paid your bills on time in the past
- Credit utilization: How much of your available credit you’re using
- Length of credit history: How long you’ve had credit accounts open
- Credit mix: The types of credit accounts you have (e.g. credit cards, loans)
- New credit: How many new credit accounts you’ve opened recently
Why do landlords and property managers perform credit checks?
Property managers perform credit checks on potential renters to ensure the renters can meet the financial commitment of renting the apartment. Credit checks teach property managers about a renter’s financial history. If applicants have fulfilled their financial obligations and maintained a good credit score, they will likely pay their rent in full and on time.Negative marks on your credit or a low credit score could impact the property manager’s decision to accept your rental application.
Improving your credit score
If you’re worried that your credit score may prevent you from renting an apartment, there are several steps you can take to improve your credit:
- Pay your bills on time: Late payments can have a negative impact on your credit score.
- Pay down debt: High credit card balances can lower your credit score, so try to pay down your balances as much as possible.
- Check your credit report for errors: Errors on your credit report can lower your credit score, so be sure to check it for accuracy.
- Limit new credit applications: Applying for multiple new credit accounts can lower your credit score, so be selective about which ones you apply for.
- Consider a secured credit card: If you have little or no credit history, a secured credit card can help you build credit.
- Consolidate any debt: You can consolidate your debt into a lower interest financing option through a credit union.
- Clear up any inaccuracies on your credit report: If you have made payment on a debt and it’s still showing on your credit report, take action to have the collection removed from your report.
Tips for applying for an apartment with a low credit score
No-credit-check apartments are not your only option if you have a low credit score. Discoversome tips for applying for a rental when you have a low credit score for an apartment:
1. Be transparent about your credit score
Transparency is essential if you’re trying to find apartments for rent with bad credit.Applying for rentals can be stressful. You don’t want to blend in with the pack or stand out because of your low credit score. You can submit a rental resume and cover letter as part of your application. Arental resumeand cover letter explain who you are, your rental history, income, and why you’re looking for a new apartment. These documents are excellent places to detail anything about your credit score that may be questionable from a property manager’s point of view.
It’s also a good idea to have an honest conversation with a prospective property manager when interviewing or touring an apartment. Give the property managercontext about your current credit situation and help the individualunderstand you more personally. Are you in debt because of student loans? Were you laid off unexpectedly and forced to use credit for purchases? Explain what led to your low credit score and assure the property manager that you’re working toward improving your credit score.
2. Show proof of financial responsibility
The best way to show a potential property manageryou can make rent is to provide proof. Be prepared to submit pay stubs, bank statements, or tax documents to prove your income. Most rentals ask renters to have a monthly gross salary that’s at leastthree times more than the cost of the rent. You could also show proof of on-time complete rental payments and your savings. Do not share any tax documents or personal bank information unless the listing is verified to avoid compromising your personal information.
3. Get a co-signer
A property manager may be more likely to choose you if you have a co-signer. If you have a friend, parent, or relative with good credit who will be a guarantor and co-sign your lease, share this information with the property manager. Many young renters who don’t have a rental history use co-signers, so they should already be familiar with the process. Having a co-signer means that person is ultimately held responsible for any missed payments, damage, or unexpected events related to your apartment. A co-signerreassures the property manager that the property management company won’t be out of pocket for rent.
4. Become a co-tenant
If bad credit prevents youfrom getting an apartment on your own, consider renting as a co-tenant. If you have a friend or acquaintance who is currently renting and looking for a roommate, this person may be able to add you to the lease as a co-tenant. In this case, the individual you choosecan be the master tenant,andyou can be the subletter.You may still need to provide your credit score, but the property managermight not place as much importance on yours since your roommate is the legal leaseholder.
5. Offer more money upfront
You can also offer to pay a larger security deposit, the second month’s rent, and the rent you need to pay when you sign the lease. Offering more money upfront shows the property manager you’re serious about this apartment and, despite your low credit score, you can afford the monthly payments. Discuss any extra funds you are willing to pay with the property manager upfront to combat possible denial when applying for apartments for rent with bad credit.
6. Include positive references in your application
Reference letters can go a long way if you have a rental history. Positive testimonials from past property managers will help prospective property managers understand that you can pay rent on time, be a good tenant, and keep the apartment in good condition. If you don’t have a rental history when choosing your rental reference, select someone who can speak positively about you, such as an employer.
7. Establish credit
Believe it or not, not having a credit score at all (no credit cards, car payments, etc.) can also negatively affect your chances of renting an apartment. Landlords like seeing a history of credit to better understand how you handle making consistent payments. Having one credit card you pay off at the end Believe it or not, not having a credit score can also negatively affect your chances of renting an apartment. Property managers like seeing a credit history to understand better how you handle making consistent payments.Having one credit card you pay off at the end of every month can help you build your credit score. This activityshows theproperty manager that you can handle financial responsibility and make payments on time and in full. Gettingaccepted for an apartment with no credit can be just as tricky as getting apartments with bad credit.
Remember, even if you have a low credit score, there are still options available to you for renting an apartment. By being proactive and demonstrating responsibility and trustworthiness, you can increase your chances of getting approved for an apartment rental.
Frequently asked questions
What is considered a low credit score when renting an apartment?
Credit scores range from 300 to 850, and a score below 600 is generally considered to be a low credit score. However, every landlord or property management company may have different criteria for what they consider to be a low credit score.
What determines my credit score?
Five factorsdetermine your credit score:
1. Whether you made scheduled loan or credit card repayments in full and on time
2. How much you currently owe on credit cards and loans
3. The average age of your loans
4. Whether you’ve recently applied for new credit or loans
5. Whether you have a mix of revolving and installment credit
How can I find out my credit score?
You can find your credit score by asking for a credit report from Equifax, TransUnion, or Experian. Request a free credit report every 12 months. Your credit report can tell you whether your score is low enough to concern property managers and alert you to any mistakes you can dispute to increase your score.
What are no-credit-checkapartments?
No-credit-check apartments are rentals that approve applicants without credit checks. These types of rentals are usually for basic apartment buildings. Private property managers who want to fill their apartments immediately typically list them.No-credit-check apartments can be riskier to lease and sometimes might have a history ofcommon rental scams. If you’re looking at no-credit-check apartments, verifythe listing through an in-person tour, virtual tour, or verified photos.
Can I still rent an apartment with a low credit score?
Yes, you can still rent an apartment with a low credit score. However, you may need to take additional steps, such as offering a larger security deposit or getting a co-signer, in order to secure an apartment rental.
Will my low credit score affect my ability to rent an apartment in the future?
It’s possible that your low credit score could affect your ability to rent an apartment in the future. However, if you take steps to improve your credit score, such as paying your bills on time and reducing your debt, you can increase your chances of being approved for an apartment rental in the future.
Can a landlord reject my rental application because of my credit score?
Yes, a landlord or property management company can reject your rental application because of your credit score. However, they must follow fair housing laws and cannot discriminate against you based on other factors, such as your race, gender, or religion.
Final thoughts
While credit scores are an important factor in renting an apartment, they are not the only factor. Landlords may consider other factors, such as income and rental history, when reviewing rental applications. If you’re concerned about your credit score, take steps to improve it by paying your bills on time, paying down debt, and checking your credit report for errors. By doing so, you can improve your chances of getting approved for an apartment rental.
These are just a few ways you can avoid renting a no credit check apartment, even with a low credit score. Once you’re ready to start looking for a new apartment, keep these tips in mind and you’ll be on your way to having a new home.
