Tips For Renting With Bad Credit
If you don’t have a good credit history, use the following strategies to boost your chances of being approved on a rental application. These strategies can be used in conjunction with taking steps to raise your credit score overall.
Check Your Credit Report
It’s helpful to obtain copies of your credit report to know what information your potential landlord will see.
Pulling credit reports from the three major credit bureaus allows you to have the same information as potential landlords because your credit history and score can vary by credit bureau. You can get these for free once a year at AnnualCreditReport.com. Once you get your credit reports, look for inaccurate information and start a credit report dispute to remove errors.
Use A Co-Signer On Your Lease
A co-signer is a person who agrees to be responsible for rent payments, damages, late fees, and other expenses if the tenant doesn’t pay. Finding a co-signer can make your rental application more appealing if your credit score is low.
If you miss payments or are evicted, your co-signer is also on the hook for the outstanding balance. Many parents or family members are cosigners on leases when young adults rent their first apartment because they may have an insufficient credit history.
Get A Rental Recommendation Letter
A letter of recommendation can improve your rental application if you have poor credit. This letter is a personal endorsem*nt from a prior landlord, property manager, or roommate who can vouch for you being a reliable and responsible tenant. They can highlight your positive qualities, such as your history of paying rent on time, maintaining the property, and being a respectful neighbor.
This information can reassure the landlord that you are still a trustworthy and dependable tenant despite your less-than-ideal credit history. Additionally, a rental recommendation letter can demonstrate your dedication to overcoming credit challenges.
Show Your Good Renting History
Presenting a history of responsible renting can help counterbalance a low FICO® Score. Landlords are more likely to approve applicants with a track record of paying rent on time, taking good care of the property, and not getting evicted. If you have been a good tenant, you can use this to your advantage.
You can provide proof that you paid your rent on time in the past. Your past rental manager may create a statement of payments, or you can show receipts or copies of rental check payments if you have them. Likewise, a positive landlord reference can go a long way in earning trust.
Consider A Private Landlord Or Rental Agent
Some rental companies may have strict policies regarding minimum credit scores for potential tenants. Some will not approve your application, even if you follow the above strategies. However, private landlords may be more willing to rent to a tenant with a lower credit score, or they might not even run a credit check. If you are striking out at getting approved by a rental agency, look for rental units from private landlords.
Consider A Roommate
If you’re having trouble getting approved for a rental application, consider applying with a roommate. If this person has a higher credit score than you, it may serve as enough justification for a landlord to accept your application, as they can be more confident at least one tenant is able to make reliable rent payments.
Prove You Can Afford Monthly Rental Payments
If you can prove you have more than enough income and can afford monthly rent payments, you may be able to get approved while having bad credit. In most cases, you’ll need to show you have three to four times the income of the monthly rent. Because your income information is not on your credit report, you would need to provide the information.
Proof of income can include tax returns, an employment verification letter, recent pay stubs, W2s, 1099s, Social Security benefit statements, worker’s compensation letters, and unemployment statements.
Offer A Higher Security Deposit
Offering a larger security deposit can help you get approved for an apartment despite having bad credit. A bigger security deposit reduces the financial risk to your landlord if you don’t pay rent on time or if there is damage to the unit.
If you can afford it, offer a higher security deposit upfront.
Look For Apartments That Accept Bad Credit
Most large property management companies typically aren’t as flexible when renting to those with bad credit. Private landlords may be more open to not pulling your credit or more willing to overlook bad credit. They may still want to confirm your income and get rental references, however.
