What Are the Ways to Rent an Apartment with Bad Credit?
When determining whether to buy vs. rent, your credit score may be the deciding factor. Buying a new home can be very difficult with poor credit. As a result, many opt to rent instead. Although it is still challenging to rent with bad credit, there are several options available.
Check Your Credit Report
Don’t just assume you have bad credit. Before starting your house hunt, check your credit score through Experian, Equifax, or TransUnion. The top three credit agencies each offer one free credit check per year.
This will give you a sense of where you stand on the credit spectrum and the options that may be available to you. Also, it can help you dispute any incorrect reporting that may be unnecessarily dropping your score.
Be Wary of Apartments that Don’t Require Credit Checks
Although no credit check rentals may seem like a miracle, these are usually false advertisements. Rental agencies and landlords will conduct a credit check to verify your identity and financial history. However, some may be willing to work around your poor credit score. It is best to honestly speak about your credit and financial situation with rental companies and landlords. Many may be understanding of your condition and willing to offer alternatives.
Additionally, it can be beneficial to employ the help of a rental agent. Their connections can offer you more rental options that are willing to accept poorer credit applicants.
Be Prepared to Pay More Upfront
One way a lot of people find to increase their chances of getting an apartment is to offer to pay more upfront. A lot of apartments will require a deposit when signing a rental agreement. With a poor credit rating, you might be able to boost your chances by offering a bigger deposit, or by offering to pay a certain amount of your rent upfront.
Many landlords refuse to rent to poor credit holders because of the high risk of missed payments. However, if you can offer a larger portion of the rent upfront, the landlord may be willing to extend a lease agreement.
Get a Cosigner
Many landlords may be willing to extend you a lease agreement as long as you have a cosigner. A cosigner works in the same way as a cosigner on a personal loan or credit card
Having a cosigner offers the landlord security that the rent will be repaid. If you are unable to make timely payments, the cosigner will be obligated to make the payments. As a result, it is important to choose someone willing and able to take on this responsibility. If you happen to miss payments, it can affect the cosigner’s credit score.
However, if you have the ability to make timely payments, a cosigner can be an added guarantor to the landlord that you can be reliable.
Sign a Lease with Someone Else
In the eyes of most landlords, more than one person on the lease means that their risk is greatly reduced. If one of you can’t repay the rent, they may go looking for the money from the other member of the lease.
This can be a good option if you plan to have a roommate or if you plan to move in with your significant other. Both of you are liable for the monthly payments, and both of your credit scores are considered when determining eligibility.
If your potential roommate has a higher credit score, they may be able to strengthen your joint rental application.
Bring Documents and References
Demonstrating your responsibility can alleviate apprehensions landlords may have about your eligibility. For example, positive letters of recommendation, past rental history, and financial information can help boost your application despite your poor credit score.
Your Past Rental History
If you’ve rented before, you might be able to get references, and you may also have ways to prove that you have never missed a payment on your rent.
If you can prove you have met your repayments previously, a landlord may be more likely to think of you as a safe option for renting, even if your credit rating doesn’t necessarily prove this.
Letters of Recommendation
If you can get letters of recommendation before renting, this can be another way to rent an apartment with bad credit. These should come from previous landlords, but you can also get them from employers or banks.
Letters of recommendation carry a lot more weight and significance if they come from trusted members of financial institutions.
Build up your Credit Score
If you are in no rush to find a rental property, you can take the time to improve your credit score. Credit repair is a time-consuming process, but it can open up tremendous new possibilities.
Consider obtaining a low-limit credit card and using it for necessities. Making timely or early payments can build your credit. Additionally, if you have any outstanding debts, repay them as soon as possible to remove them from your credit report. Finally, utilize the free credit check options from the credit bureaus to regularly monitor your standing and progress.
Some people also dispute items on their credit reports to boost their scores.
Pay Stubs and Bank Account Information
More proof that you have an income and that you can promptly repay your loans is bound to add some weight to your application. Bring pay stubs to prove that you have an income that you can use to make these payments.
On top of this, it might also help your cause if you show your bank account information. It feels like something of an invasion of privacy, but this can be a way to show how well you manage your finances.
Brag About Your Savings Account
Landlords love it when a tenant has money saved. Landlords are primarily concerned with ensuring that the monthly rent is paid on time.
If your landlord expresses concerns, then you can try to minimize their doubts by showing that you have a sizable savings account. This means that with finances behind you, you’ll be able to pay the rent.
The Bottom Line
Increasing your credit score will almost always help you in your adult life. When it comes to getting a car loan, a mortgage, or just finding an option to rent a property, a good credit score is likely to show that you are financially responsible.
However, not being able to show this doesn’t have to be the end of your apartment search, and some specific bad credit apartments may be available to those who can prove their financial reliability. Letters of recommendation and proof that you have financial backing may still allow you to have choices when it comes to
