When a landlord conducts a rental credit check, they assess your creditworthiness to determine if you’re likely to pay your rent in full on time. They might look for a specific number, such as 600 or 650. But your credit score is just one part of your rental application, with the right approach, tenants can land an apartment even with a poor credit score.
Your credit history is more than just your credit score. Generally, a rental credit check contains the same data as any other traditional credit check. After the landlord gathers critical pieces of information about you – such as your name, birth date, Social Security number, and address – and your permission to run the check, they’ll receive details about your credit history. Additionally, they may see details about former addresses and similar data tied to your credit accounts.
Along with your credit history, the landlord can also receive a credit score. That figure represents your creditworthiness, giving the landlord critical insights with just one number.
Typical Rental Credit Check Requirements
Technically, there isn’t a formal line in the sand when it comes to rental credit checks. Landlords aren’t required to have the same cutoffs. Instead, they can typically decide what they’re comfortable with and use that to determine criteria.
Essentially, as long as they apply the same criteria to all applicants in accordance with local law, the requirements they set are in their control. As a result, some landlords may set the minimum squarely in the “fair” credit range, while others may aim higher or lower.
Landlords may also have other credit check-related requirements. For example, tenants may be barred from having a late payment within a certain amount of time.
Some landlords may openly advertise their cutoffs and other criteria or might provide that information if a potential applicant asks. As a result, prospective tenants should feel free to request details about the credit check requirements.
How to Prepare for a Rental Credit Check
In most cases, the best way to prepare for a rental credit check is to review your report before you start applying for apartments. You can check your report at each major bureau for free by using AnnualCreditReport.com, a site that’s sponsored by the government.
While that won’t show you your credit score, it does allow you to review it for accuracy and dispute issues. If you find erroneous information, you want to file a dispute with every bureau that has an inaccurate record. Usually, you can do so online, and they have 30 days to respond.
Additionally, by taking a look at your credit reports, you’ll know what landlords will see. Then, you can prepare to address any potential points of concern, ensuring you aren’t caught off-guard by problems and can discuss them with ease.
There are also other ways to access free credit scores. For example, many credit card issuers give cardholders access to their score for free. Additionally, there are apps that provide credit scores at no cost.
Just be aware that not all free credit scores are the FICO scores landlords typically use. Instead, you may see VantageScore credit scores instead. The difference between your FICO and VantageScore scores can be quite different. However, you can use a VantageScore to gauge your overall financial health and monitor your progress if you’re trying to improve your credit.
What to Do If You Have Bad Credit
If you’re trying to figure out how to pass a rental credit check even with bad credit, you want to use the right approach. In most cases, a conversation with the landlord is essential.
At a minimum, you want to be ready to address any concerns they may have after seeing your report and score. In some cases, you may even want to talk with them about your situation before they run the check, allowing you to take a proactive stance on the matter.
However, a conversation alone may not be sufficient. At times, you may need to take other actions to showcase yourself as a low-risk tenant. If you aren’t sure what to discuss or other steps you can take to increase your odds of securing a new rental, here’s a closer look at what to do if you have bad credit.
Highlight the Stronger Parts of Your Application and Financial Situation
As a starting point, highlighting stronger parts of your application could help you overcome a bad credit score. For example, if your income is far above the minimum threshold to qualify for the apartment, that could put the landlord’s mind at ease. The same goes for proof of employment at a single company for an extending period, showcasing your income stability.
Similarly, having an ample amount in savings may make your bad credit less of an issue. It shows that you have a safety net, and that may make the landlord more comfortable.
The right references may help you overcome bad credit when applying for a new apartment. If you previously rented from someone else recently and made your payments on time and in full, your former landlord could become an asset. They could speak with prospective landlords and explain your reliability, potentially making you seem like a safer bet.
Usually, this approach only works if you have an exceptional history with a previous landlord. If there were any issues during your tenancy, providing your former landlord as a reference could work against you instead.
Explain Extenuating Circumstances
Sometimes, a poor credit score happens for reasons outside of your control. For example, maybe you lost your job due to a coronavirus layoff and fell behind on some bills, leading to derogatory remarks on your credit report.
Individuals who don’t have many records on their credit report may also have a lower score. This isn’t because they made missteps; it’s simply the lack of experience with credit working against them.
If you were genuinely impacted by extenuating circumstances, explaining what occurred could work in your favor. While you don’t want to attempt to make excuses for poor behavior, highlighting incidents that were out of your control and are now resolved could help you overcome hurdles created by your lower credit score.
Offer Extra Rent Upfront
In most cases, landlords worry about credit scores for financial reasons. The property was a major investment for them, and they want to make sure they find a reliable tenant who will pay what’s owed and treat the unit well. Often, landlords view bad credit as a sign of irresponsibility, something that is quite worrisome in their eyes.
At times, you can alleviate any concerns created by bad credit by offering extra rent upfront. Not only does it show that you were able to save a significant sum, showcasing that you are responsible, it also gives them guaranteed income from the unit for a longer period of time.
Even just one or two months beyond what’s typically required could do the trick, depending on the total lease term. However, the more you can offer, the better.
Find a Cosigner or Roommate
At times, your best bet for overcoming the impact of a bad credit score is to find a cosigner with good credit who’s willing to put their name on the application. With this approach, the landlord factors in the financial situation of the other person and gets another place to turn if you miss a payment. As a result, it potentially makes you seem like less of a risk overall.
Finding a roommate to add to the lease could work similarly. There’s a second person associated with the lease, making your bad credit less of a risk overall.
However, you may need a larger unit to be comfortable if there’s an extra person, which could push the total cost up. If the roommate reneges, you could be on the hook for a much larger monthly rent amount, creating a financial hardship that wouldn’t have occurred if you rented a smaller place alone.
Focus on the Right Properties
Whether a landlord is willing to work with you may vary depending on the rental you’re trying to secure. Apartments or houses overseen by large property management companies are usually less flexible. As a result, if your credit report or score doesn’t meet their minimums, they probably won’t rent to you.
If you have bad credit, you may be better off working with individual landlords with fewer properties. Some may be willing to talk to a tenant who looks higher risk on paper and come to an arrangement. Others may bypass credit checks entirely, allowing you to avoid the issue.