Many landlords, especially property management companies, will check your credit before approving your application to rent an apartment. Poor credit can make it difficult to find a place to live but it doesn’t make it impossible. Many people with bad credit find apartments. You may have to work harder at it than someone with great credit would, but there are things you can do to make the task easier.
What You Can Do
You’re not the first person to look for an apartment with a less than optimal credit score. Lots of people have done it, and their experience gives us lessons on how to succeed.
Try these proven steps:
- Know your score. Check your credit score and all three of your credit reports before you start. You may not like what you see, but you need to know where you stand.
When checking your report, look for errors that could be dragging your score down. Also, look at your credit report and think about how you’d explain it to a landlord. Are the damaging parts mainly in the past? Is there a single factor, like medical bills, that caused the damage?
If you know what’s in your credit report, you’ll be in a better position to discuss it honestly with a potential landlord.
- Look for landlords that won’t check your credit. Large property management companies that run apartment buildings or complexes will usually do a credit check, but small individual landlords with only a few units may not. Try searching online for landlords in your area who don’t do credit checks or asking friends who have rented recently about their experiences with different landlords. Sites like Craigslist or newspaper classified ads may be good places to look for apartments rented by individual owners.
- Make a good first impression. This is important for anyone, but it’s even more important when your credit isn’t great. Dress professionally, be on time, be polite, and be ready to answer questions. Put yourself in the landlord’s place. What would you look for in a tenant?
- Be honest. If you know a landlord is going to check your credit, tell them upfront what they will see. Explain what happened and what you’re doing about it.
- Prove your income. Most landlords prefer tenants with a monthly income that’s at least four times larger than their monthly rent. Bring pay stubs, tax returns, bank statements, or any other evidence that you earn enough to afford the rent.
- Show your rental history. If you’ve rented apartments before and established a good payment history, bring your receipts. Your landlord is likely to care more about your record at paying rent than your record at paying off your credit cards.
- Show your bill payment history. A good track record of paying utilities and other recurring bills may help you to show that you’re financially reliable.
- Show off your savings. If you have an emergency fund or a savings account with a solid balance, bring statements that show it.
- Offer to pay a larger deposit. Offering to pay two or three months upfront shows that you have the financial capacity and gives your potential landlord a buffer in case of non-payment.
- Bring references. Former landlords and employers are best, but a letter of reference from any credible person who knows you well will help.
- Offer to set up automatic payments. Automatic payment systems assure you’ll make every payment on time and take the responsibility for collection off the landlord’s shoulders, though you’ll have to make sure there’s enough in your account every month.
- Get a roommate, if the apartment allows dual occupancy. Two incomes are better than one, and whichever roommate has a better credit record can take on the responsibility of the credit check.
- Get a cosigner. A cosigner with good credit can reassure your landlord and get you past the credit check hurdle. Be sure that you and your cosigner are fully aware of the responsibilities and risks of cosigning a lease.
- Consider a less desirable apartment. If you have financial troubles in your past, avoid taking on a higher rent payment than you can afford. Even if it means a longer commute or fewer amenities, an affordable apartment can help you get the rest of your financial life back on track. Take some time to rebuild your credit and you’ll have a better shot at getting – and affording – that dream apartment.
None of these steps guarantee that you will find the apartment you want. They do raise your chances of finding the apartment you need.
What Are Landlords Looking for On Your Credit Report?
Landlords aren’t just checking your score. There are specific red flags that they will be looking for. Look for these items when you review your credit report.
- Payment history. Your landlord’s main concern is finding a tenant who will pay the rent on time without constant pursuit and reminder. If you have a track record of late or missed payments, they will be concerned.
- Evictions, rental arrears, and other housing-related issues. Landlords looking at your credit report are mainly interested in your history of paying housing-related expenses. If you have credit card issues but you’re always paid your rent on time, they may not be concerned. If you have an eviction or numerous rent arrears on your record, they’ll be worried.
- Excessive debt. Your credit report will show your prospective landlord how much you owe. If your debts are too large for your income, landlords have reasonable cause to worry about whether you’ll be able to pay the rent.
- Bankruptcy. If you have a bankruptcy on your record landlords may be concerned, and if the debts discharged in that bankruptcy include substantial rent arrears, they may be very concerned. One possible upside: if you’ve declared bankruptcy once you can’t do it again for several years.
If your credit report features these elements you may have to work harder to find an apartment.
Bad credit doesn’t make it impossible to find an apartment, but it can make it more difficult. Understanding the obstacles can make it easier.
You may have to allocate more time for your apartment search. Don’t be surprised if it takes a while. Don’t be disheartened by rejection. Learn from each experience and move on.
Make a plan, decide what you can offer, and have your supporting documents in order. Be honest, make your case effectively, and you’ll have a good chance of finding an apartment even with a tarnished credit history.