Searching for an apartment is an exciting experience, especially if you’re moving to a new city or on your own. However, the process to get approved for an apartment can be tricky if you have no credit or a credit score below 629.
To increase your chances of getting your application approved for your dream apartment, it’s important to know what landlords are looking for and how to practice good credit borrowing habits. Here’s everything you need to know about what credit score is needed to rent an apartment.
What Is a Credit Score?
A credit score is a number between 300 to 850 that credit bureaus provide borrowers to let them better understand a person’s creditworthiness and credit reliability. Your credit score is influenced by various factors, such as your payment history, credit utilization, account age and type, new accounts, and credit mix.
There are different types of credit scoring models — like FICO 9 and VantageScore — that weigh these factors differently, but they all work to rate your creditworthiness. Landlords look at an applicant’s credit report to better understand the way they handle their finances, view their payment history, and see how much debt they currently owe.
What Credit Score Do I Need to Rent an Apartment?
To rent an apartment, landlords typically require renters to have a minimum credit score of 629. But each landlord and property management company vary in their overall requirements, since a credit score alone doesn’t provide a full picture of who you are as a renter.
If you currently have a lower credit score but make on-time payments towards your bills and have an income of three times the rent amount, then you can still get approved for an apartment. But it’s advised to get your credit score closer to the 700s to easily find your next home without any sudden delays.
When landlords request a credit report, they check to see if you can afford the set rent price and have a history of making payments on time. In addition to your credit score, they may also look at the following:
Credit utilization: Most landlords don’t focus too much on how much available credit you’ve used. However, if you owe too much debt already, then this can deter them from accepting your application out of fear you won’t have enough money left over to pay rent.
Account summaries: If you have multiple accounts open, especially ones with any amount past due, then this can indicate an inconsistent history of making required payments on time.
Total tradelines: Payment history is the biggest contributor to your credit score, as well as what landlords pay the most attention to on your credit report. If you’ve been missing payments on current tradelines — or existing lines of credit — then this will usually result in your application being rejected.
Can You Rent an Apartment With a Low Credit Score?
Although it’s very possible to rent an apartment with a low credit score, you’ll need to make at least three times the rent in monthly income and illustrate good credit borrowing habits so you can prove to your landlord that they can trust you to make timely rent payments throughout your lease. A landlord may also require you to find someone you trust to become a co-signer on your lease in case you’re suddenly unable to make payments.
How to Improve Your Credit Score as a Renter
As a renter, it’s important to always practice good credit borrowing habits to increase your credit score. In addition to making on-time payments on your bills and keeping your credit usage below 30%, renters can begin reporting rent payments to TransUnion with rent reporting tools like CreditBoost.
With CreditBoost*, you can contribute to your FICO 9, FICO XD, and VantageScore credit scores for $3.95/per reported month. This can be especially beneficial if you currently have little to no credit and are looking to build a strong credit history through the rent payments you’re already making. You can also report your utility payments to a credit bureau or explore credit builder loans if you’re looking to improve your credit score without a credit card.
Report Your Rent Payments With CreditBoost
Now that you know what credit score is needed to rent an apartment, the next step is to practice good credit habits to increase your chances of getting approved for your next place. To start, you can invite your landlord to Avail to set up your account and begin reporting your rent payments through CreditBoost. Whether you’re moving into a new rental or still paying rent at your current place, you can start improving your credit health through each on-time rent payment.
Create an account or log in to turn on credit reporting today.
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.
Landlords generally prefer a minimum credit score of at least “good,” which is 670 to 739. A score at or above that range will make apartment applications easier. Still, even a “fair” (580 to 669) or “poor” (300 to 579) score won't necessarily put the kibosh on your rental hopes.
While 600 may not be as desirable to landlords, it still may be possible. That's because acceptable credit scores can vary by region and a landlord's discretion. And landlords may consider other factors including a person's income.
Landlords generally require a minimum credit score of 629, but this can vary. If you discover your credit score is below 600, your credit report can let you know what to focus on to continue increasing your score. This can be making on-time payments for a set time, reducing utilized credit, or limiting hard inquiries.
For example, a poor FICO score is considered to be 300–579 and a poor VantageScore is 300–660. This doesn't mean that renting an apartment with bad credit is impossible—but you may have to take some extra steps to increase your chances of being approved.
The minimum credit score needed to rent an apartment varies from location to location. Wealthier, more competitive areas will require a higher minimum score, as will new or luxury buildings. However, a good rule of thumb is that most landlords look for a credit score of at least 600.
If you regularly pay your rent on time and in full, you can have your good payment history reported to credit bureaus to help raise your credit score through a rent-reporting service. Know that any rent-reporting services could require a fee for the service, which is usually paid on a monthly basis.
If an applicant doesn't have an ideal credit score, landlords have options and can still rent to them. Landlords can ask applicants to provide context about their low score, have a guarantor for the lease, show proof of income, pay a larger security deposit, and have a shorter lease term.
Fair Credit- Credit scores between 580 and 669 are considered fair. While you may think that a fair credit score can make it more challenging to secure a lease, that's generally not the case. Depending on the property and the location, most landlords look for a score of 600 to 650 or higher.
When landlords look at your credit history, they examine a few factors. For instance, they want to see your overall credit score, payment history, bankruptcies, foreclosures, and overall credit activity. After all, they want to ensure you can pay your rent each month and pay for potential damages, should they occur.
Landlords use credit reports, credit scores or a combination of the two when making rental decisions. Credit card debt can drag down your score if you're using more than 30 percent of your available credit, and landlords may investigate your credit report to find out how you're using credit.
What Is a Bad Credit Score? 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.
You should aim for a minimum credit score of at least 620 before you apply for a rental home. If you don't meet the credit criteria, a high income and proof of finances can show the landlord you're stable and can afford the rent.
If you have a credit score that's below 620, you will find it more difficult to rent an apartment. You can work around the situation by renting with a smaller landlord, finding a cosigner or guarantor for your rental payments, or getting a roommate.
Yes, you can rent an apartment with bad credit, but it may require additional effort, such as finding flexible landlords, offering a larger security deposit, or getting a cosigner.
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