Almost all landlords check the credit score of prospective tenants. If you have bad credit, you need not despair — you can still rent a decent apartment. By offering money up front, for instance, or finding a co-signer, you can often make up for a poor credit score.
Read on to learn more about how you can rent an apartment with bad credit.
1. Don’t give up hope
Try not to beat yourself up over having bad credit. Situations that put people in a bad financial spot can happen to everyone. Take comfort in knowing that a bad credit score doesn’t stay with you forever. Once you start taking measures to build your credit, you could start to see improvements in your score in as little as six months.
2. Build up your credit score
Probably the best way to build your score fast is with a credit card. Start paying off your balance on time every month, and you’re on your way. Then when you pay off your credit card debt, you can start using your card again, but only for what you can pay off at the end of the month. That practice can really help you maintain a higher score. And as you learned, a higher score gives you better options.
3. Change your expectations
While you’re working on raising your credit score, you need to live somewhere. You might land a great place with bad credit, but you also might need to settle for an apartment that isn’t quite as nice as you would like. It helps to go in with the mindset that this not-perfect apartment is only temporary while you’re improving your credit so that you can get a better place.
4. Offer money upfront
Try offering the landlord cash upfront. Landlords and property managers don’t like to rent to people with bad credit because they’re concerned that if the applicant has bad credit from not paying their bills, there’s a pretty good probability this applicant won’t pay the rent either. By offering to pay more than what’s required, you take away some of that worry.
If the apartment complex requires first month’s rent plus security deposit, for example, try offering the first two or three month’s rent in advance plus the security deposit. Then make sure to pay the rent on time for the remainder of your lease term.
5. Provide documents and references
Landlords and property managers usually use a credit score and credit report as a gauge when approving or denying a rental application. But they really just want to be reassured that you will pay the rent on time every month. So reassure your future landlord by providing them with documents that can prove your case. Here’s what to show your potential landlord:
Your past rental history: If you paid the rent on time each month in your last apartment, show proof. By proving you’re a responsible tenant, you’re more likely to land this apartment.
Letters of recommendation: Ask your past landlord, current employer, and anyone else who can vouch for your financial responsibility to write a letter of recommendation for you. Have your references provide their contact information so your potential future landlord can contact them directly.
Paystubs and bank account information: Show your landlord the money, so to speak. If your potential future landlord sees that you have steady work and money in the bank, they should be more willing to rent to you, even if you have bad credit — especially if the bad credit was from the past and you’ve been paying your bills on time for the past year or so.
6. Set up automatic payments
If you agree to use a payment service that automatically deducts from your bank account, your future landlord might be more willing to accept your application. Of course, this system is not foolproof — if you don’t have money in your account, the payment won’t go through. So offering to pay this way might not mean much to a potential landlord, but as a goodwill gesture, it can help your case.
7. Apply at places with lots of vacancies
New apartment complexes might be more lax with rental requirements since they need to fill vacancies. You might want to look for apartment buildings with banners draped across the building offering move-in deals.
Using this same line of thinking (helping a landlord fill a vacancy), you might want to look for an apartment during the dead time for new rentals, which is during the winter months, especially in cold climates. Fewer people are renting during bad weather, so if there is a vacancy, you might be able to snag that spot.
8. Go to a less desirable apartment complex
Some apartments don’t even require a credit check. These are often older buildings, and they might not come with all the fancy new amenities. You might need to lower your expectations and rent any place you find, as long as it’s safe, if they aren’t strict about your credit history.
9. Use a cosigner
If your credit history is preventing you from renting an apartment on your own, you might be able to rent your dream apartment by using a cosigner. Your cosigner can be anyone you know who has good credit and is willing to be your backup.
If you fail to pay the rent one month, your cosigner will be responsible for paying it. If they don’t, their credit score will be affected, and they could be sued for money you owe.
So if you do find a friend or family member who’s willing to cosign for you, it’s best to never let it get to the point that your cosigner needs to pay your bills. That could cause bad feelings between you and your cosigner. An apartment is probably not worth severing or damaging a relationship, which could happen if you force your cosigner to pay your bills.
10. Get a roommate
You might not want a roommate, but if their income and credit history is good enough, this could be a good strategy for you to get into a great apartment. Not only can this improve your rental application, but you can often split a much nicer two-bedroom for less money than you would spend on a one bedroom apartment if you were renting on your own.
What’s considered bad credit anyway?
Each landlord or property manager sets limits for what they consider to be a bad credit score. FICO scores range from 300 to 850. The dividing line between good and bad credit is often a 620 FICO score — above that is usually considered good, and below that is typically looked at as being a bad score. But this varies depending on the landlord.
Your credit score is not the only factor looked at. Landlords also consider the reason for the bad score, which they can determine from your credit report. Maybe your score is below 620 because you went through a short sale, for example, but you always pay your bills on time and have a steady job. Or maybe your score is below 620 because you’re maxed out on your credit cards, have recent accounts in collections, and are currently late with bills. You might have a low score with either scenario, but the first scenario looks much better to landlords than the second scenario.
The bottom line
Reality check: if you have bad credit, it will probably be more difficult for you to rent an apartment. Knowing that, you probably should try to raise your credit score and keep it as high as possible. But in the meantime, it is possible to rent an apartment with a bad credit score. Be patient, try some of the above methods, and you should be in an apartment in no time.