How to Rent an Apartment with Bad Credit

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Renting an apartment with bad credit can prove to be incredibly difficult if you don’t know what you’re doing. Millions of American’s live with bad credit. A low credit score can be the result of poor choices or poor luck, but either way, that little number means a lot to landlords.

Even if you can afford a certain apartment, a low credit score can prevent you from coming to an agreement with a landlord. When you’re trying to find somewhere to live, there are things you can do to get the apartment you want with despite your low score. That’s why we decided to write this article on how to rent an apartment with bad credit.

How do you know if you have bad credit?

There are many different ways to check your credit score, but there are also many different scores. People think that a credit score is a universal number that defines a person’s credit worthiness. For example, myFICO might show you a different score than Free Credit Report. According to CreditKarma, there are dozens of scoring models that calculate scores a little differently.

MyFico

my fico credit score dashboard

Free Credit Report

experian credit report dashboard

Credit Karma

credit karma credit report dashboard

Using an online tool to check your credit score for free is a good way to get started.

There isn’t a specific benchmark for apartment complexes when it comes to credit score. Obviously, the lower the score is, the lower chances a person has of being approved.

Here are the top nine ways you can rent an apartment with bad credit (or nonexistent credit):

  • Ask friends & family

    In 2019, real estate is still one of the most popular investment strategies. Many people are dipping their toes in the real estate business. It’s more than likely that you know someone who has something available for rent. At the very least, you know someone who knows someone who owns rental properties. Ask around and start talking to people, and don’t limit yourself to apartments. Connections are a great way to find a place to live with bad credit.

  • Provide proof of income

    Many apartments will require a proof of income instead of a credit check. A proof of income can be a paystub, tax return, or offer sheet (if you just accepted a new job). Most apartments will require that a person’s monthly income be equal to at least three of four times the rent.

    For example, an apartment with a monthly rent of $1000 will require $3000-$4000 in gross monthly income (depending on the apartment). If the apartment you want does credit checks, you can explain the situation and provide a proof of income. They will probably still run a credit check to make sure you don’t have any absurd outstanding debts that will prevent you from paying your rent.

  • Look for open rooms

    If you do your research, you can find that there are plenty of places that are offering single rooms for rent. These situations usually occur when someone moves out of a house or apartment, leaving their roommates to find another tenant.

    Your new landlord might still require a credit check, but it’s far less likely. Mainly because there are separate people on the lease. That means each person is responsible for less monthly rent. Rather than needing $4000 in monthly revenue, you might only need $2000.

  • Offer to pay more up front

    If you can afford it, you can offer to pay more upfront. You can pay for the first two months up front, or you can pay a higher security deposit. Either way, this is showing the landlord a couple things. (a) you make enough money to afford that large of a payment upfront. Or (b) you are responsible enough to have that amount of money saved. Both of those things are indicators of a financially responsible person.

  • Look for a cheaper home

    There may come a point where you’ll need to accept the fact that you might not be in a position to rent that particular apartment. Maybe you’re young and don’t have credit yet, or maybe you just can’t afford it. Apart from having a good job (or wealthy parents) you’re probably going to have to accept a less desirable place until you can boost your credit score. If you’re a student, take out a student credit card and start building your credit.

  • Credit references

    What is a credit reference? Wallethub defines a credit reference as a document that attests to the creditworthiness of a prospective borrower or rental applicant. A credit reference can even be a letter from a credible source that would show an applicant’s financial qualification. This might include a cell phone company, a utility company, previous landlords, or student loan.

  • Letters of recommendation

    If you’re starting to get desperate, you can ask your personal references for letters of recommendation. This method isn’t guaranteed to work (none of them are, actually) but it could help your case in conjunction with one of the alternatives. Call up your boss, mentor, teacher, or friend to ask them to do you a huge favor. If someone is willing to write a recommendation for a person, it says a lot about that individual.

  • Cosigner

    A cosigner (or guarantor) is a person who signs a contract (such as a lease or loan) with a person who has a high risk of default. A cosigner is someone who assumes the financial responsibility of a contract in the event that the original person can’t pay. People with high risk of default are those with low-paying jobs, have a lot of debt, or poor credit scores.

    If you are confident in your ability to pay your own rent, there’s no shame in having a cosigner. If you can afford the place you are applying for, nothing but a signature will ever be required. Having a cosigner can be a good way to get the place you want all while building up your rental history and credit.

  • Craigslist

    Many of the rentals you’ll find on Craigslist are from private owners. A private owner might run a background check or expect proof of income, but they probably aren’t going to run a credit check. If you’re going to turn to Craigslist, make sure you know how to stay safe when you are going into the rental showing.

Researching how to rent an apartment with bad credit isn’t a fun thing to do. If you are tired of rejection emails and bad news, don’t give up hope. You’re going to find a place to live. There’s always another alternative. Try out some of the tips from above.

If none of these tips work, you might be committed to finding another option until you can raise your credit. Don’t wait! Start raising your credit score right away. A company like Lexington Law can help you by analyzing your credit report and creating a plan to get your credit back on track.

Lexington Law

lexington law dashboard

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Posted in DIY Toolbox, Renting

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