When looking to rent an apartment, your credit scores may be taken into consideration. The reason for this is that your credit may be examined by the landlord or property manager as part of a tenant screening report. Your credit history can help them assess whether you might be a responsible tenant by demonstrating to them how you have handled money in the past.
Some property managers and landlords might search for renters who have at least a fair or good credit score. Additionally, while meeting the minimum credit score requirements does not ensure approval, being aware of what they look for may help you present yourself as a strong candidate for a rental.
How Landlords Analyze Your Credit Report
Landlords will typically review both your credit score and report. In many ways, your credit score is a summary. It provides landlords with a quick overview of your creditworthiness and can be used to decide whether to review the rest of your application.
However, they will probably check the remainder of your credit report if your credit score does not automatically preclude you from renting the apartment. Generally, landlords will look for potential red flags, such as:
- Late payments
- Accounts in collections
- Recent hard inquires
- Bankruptcy history
- High debt payment amounts (in comparison to stated income)
Depending on the landlord, you might not be eligible for an apartment if any of those details apply to you. Furthermore, state laws might prohibit landlords from taking into account specific information found on your credit report; however, these laws may vary based on where you live.
How to Determine If Your Credit Is Strong Enough
Before you try to rent an apartment, take a look at your credit report and score (it’s free). Look out for any potential issues, such as late payments or charged-off accounts that could be red flags for landlords.
You can apply for apartments more strategically if you have a clear understanding of your credit situation. You should be ready to present financial documentation as proof of your solvency if your credit score is lower than average or if your credit report contains negative information.
How to Secure a Rental With “Fair” or “Bad” Credit
While having a minimum credit score of 620 or 650 may give the impression that people with credit scores in the poor or fair range are ineligible for apartments, this is untrue. Many landlords are willing to consider other factors before making a decision, and some do not have a minimum credit score requirement for renting an apartment. To help you qualify, others might have particular options available, such as the option to add a cosigner.
Diligence is important when renting an apartment with bad credit. Additionally, focusing on the appropriate properties may improve your chances of being accepted.
Even though your ideal home might not be within your reach, you should be able to locate an acceptable apartment for the time being. After that, you can raise your credit score by making wise financial decisions, which will help you get into your dream apartment.
Additionally, there are a number of ways to improve the appeal of your rental application in order to offset a low credit score. Here are a few approaches you can take:
Offer to pay an extra month upfront.
This not only demonstrates to the landlord your seriousness about the rental, but it also shows that you have the money on hand and the ability to manage your finances well enough to save money. Try it anyway—it might not work with every landlord.
Bring on a cosigner
Adding a cosigner to the lease may help your application get approved if your credit score isn’t quite high enough to get you a rental in your area. This is especially true in competitive markets. This is a significant request, so be sure you can make the payments because your cosigner will be responsible for the rent if you don’t.
Look for cheaper apartments
You can be required to provide proof that your monthly income is three or four times that of the landlord. An excessive rent-to-income ratio can make landlords nervous, even if your other monthly expenses are modest. If your application has already been turned down, consider your chances with rentals at a lower price point. After you’re accepted, live up to expectations as a tenant, obtain a stellar reference, and utilize that as leverage to eventually move into a better apartment.
Bring on a roommate
While it may not seem ideal, splitting costs with a roommate can help you get into a rental that you might not otherwise be able to afford. Ask around your workplace or within your friend group. Like you, there’s probably someone else who wishes they could live in a nicer apartment but finds it difficult to make ends meet. Shared living arrangements can save you a significant amount of money and don’t have to be permanent. Additionally, if the roommate you’ve selected has good credit, it will enhance the application overall.
In the end, landlords want occupants they can rely on to pay the rent and maintain the apartment. If you have a low credit score, getting the rental may be as simple as supplying stellar references. Ideally, your references come from former landlords, but if not, you may get by with character references from coworkers or employers. The idea is to show that you’re a law-abiding citizen who will respect the land and abide by the regulations.
Emphasize the most favorable aspects of your application
If your credit score isn’t as high as you’d like it to be, make an effort to highlight the stronger points of your application. Highlight the length of time you’ve been at your job or your stellar references. You may also draw attention to elements of your way of life that make you a desirable tenant. If, for example, you work long hours and are not home much, the likelihood of the landlord receiving a noise complaint about you is low. If the apartment allows pets but you don’t have any, you’re also less likely to damage any property. Think of something unique that makes you a good tenant, then make an effort to showcase it.
Although renting an apartment usually requires a credit score of 620 or above, your landlord’s decision-making process takes into account a number of other factors. Do not allow a low credit score prevent you from submitting a rental application. Similarly, you shouldn’t think that getting a high credit score will guarantee you your dream rental. Consider your application in its entirety and present yourself as a desirable tenant. Recall that over time, you can increase both your credit score and your list of reputable references.
FAQ
Which credit score is used when applying for an apartment?
FICO credit scores are typically used by landlords to assess an applicant’s eligibility for an apartment.
Do apartments use FICO or TransUnion?
Landlords check your credit report and score through Equifax, Experian, and TransUnion, which is the credit bureau most frequently used for apartment rentals. For apartments, there isn’t a set industry standard, but your landlord might favor using one report over another.
Can you get an apartment with a credit score of 500?
Generally speaking, landlords prefer applicants with credit scores between 670 and 739, or at least “good.” Applications for apartments will be simpler if your score is in that range or higher. However, a “fair” (580 to 669) or “poor” (300 to 579) score won’t automatically end your chances of finding a rental.
Do landlords use Experian?
For both landlords and tenants, Experian Connect is a service that lets you request and access the information of people who give consent. Although adaptable to many sectors, it is particularly useful for landlords screening potential tenants.
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