6 Steps to Rent an Apartment With Bad Credit

An individual must do more than the average applicant to rent an apartment with bad credit. Certain measures can be taken to prove you as a strong rental applicant.

Read more to find out what credit score landlords require and why. 

What Credit Score is Required To Rent An Apartment?

Renting an apartment with bad credit can be challenging because landlords ideally like to do a credit check before leasing you a place. This is done to determine whether an individual is a good or bad credit risk and their ability to make on-time payments. 

The higher your credit score, the lower the tenant risk you will be. A 620 FICO Score is considered to be fair credit. What holds more importance for landlords and property managers is your credit report and how you end up with the credit score you have.

Can You Lease an Apartment With Bad Credit?

An apartment can be rented with bad credit; however, how you secure the rental should be strategic. Follow these steps to appear as a strong applicant and be approved for an apartment with bad credit score.

1. Pay Upfront

Pay a big security deposit to your landlord or property manager, or pay rent a couple of months in advance to make a good impression. This will give your landlord affirmation about your positive credit habits and creditworthiness. 

Paying rent in advance will position you ahead of schedule and act as a buffer in cases where financial challenges are faced in the long term.

2. Get a Cosigner

Get a cosigner having a good credit history to assist you with applying for a new home. Cosigners are equally responsible for paying back a debt.

After procuring a cosigner, failure to fulfill a commitment will damage your credit history and score.

3. Provide the Necessary Documents

If your consumer profile is not impressive, and carrying a low score, it is recommended to submit your application with documents indicating that you are a credible applicant capable of paying rent each month. You will need the following documents:

• Give evidence of responsible rental history via bank statements that prove timely payments being made.
  
• Recommendation letters from previous property managers, landlords, business associates, employers, or roommates. Ensure that your letters are from credible sources so they can help your case.
  
• A pay stub or paycheck as proof of employment. To show you have a steady job, give proof of your salary from several months ago and not just from a few weeks back.
  
• Utility bills. Providing evidence of your utility payments on time every month additionally depicts that you’re consistent, dependable, and reliable.

If your credit score is not accurately reflected in your credit history, these additional documents will help fill in the gaps in the interview with your landlord.

4. Shop for Apartments That Don’t Require a Credit Check

Most landlords carry out a credit check before renting out property to you. However, some property owners do not require a credit check and trust you to make your payments on time and build your credit.

5. Consider Sharing with a Roommate

Landlords will willingly accept your rent application if you plan on sharing with roommates. An alternate is to shift in with somebody who has already rented an apartment or property. This way, your expenses will be lowered, and the responsibility for the apartment will be divided. You will still, however, need to undergo a credit check.

6. Readapt 

The apartment you choose and the one you qualify for may vary. One of your choices may not have a gymnasium, built-in cables, or a pool and may even be located on the less-desirable side of the town. This readjusting period and extra savings will give you sufficient time to rebuild your credit. 

What Do Landlords Review in a Credit Report?

Knowing why and what a landlord assesses on your credit report is the first important step:

• Payment history: Your payment history accounts for 35% of your FICO Score. Establish an auto-pay system for recurring payments such as bills, student loans, and auto loans. Ensure your account has sufficient finances for payments, or you could be subjected to extra charges for late payments. A landlord will examine your financial management habits by viewing your credit report to determine whether rent can be expected on time every month.

Contact your lender or creditor to know more about alternative payment plans that decrease the amount you have to pay monthly for student loans.

Banks or credit card unions might lower your payment or interest rate till some time if you are facing any financial constraints. 

• Rental history: Ask your proprietor to report rent payments to consumer credit data collection agencies if your monthly installments don’t appear on your credit history so that future landlords can view your complete rental history. They will also be able to see any red flags if there are any, such as outstanding balances, unpaid rent to a previous proprietor, or an eviction. 
  
• Debts: Accumulating unpaid taxes, credit cards, medical receipts, or loans. Too much debt questions your ability to afford monthly payments of rent.
  
• Bankruptcy status: The appearance of negative entries in your credit report, such as bankruptcy, can damage your credit score and pull it down significantly. They stay on your report for about ten years.

Your rental history, payment history, debt amount, and bankruptcy status are integral to your consumer profile. Rental companies and landlords will assess all these factors to determine whether you are a good credit risk.

Bottom Line

If you want to rent an apartment with bad credit, you will need to take the necessary steps to increase your credit score so that the chances of your application being approved are high and in your favor. Apartment search and house hunting become much easier with a good credit history and score.