How to Rent an Apartment with Bad Credit Score

How to Rent an Apartment with Bad Credit Score

Kerry Vetter
by Kerry Vetter
Updated: November 18, 2021

Content

A High Credit Score – Definition
What is FICO & Why Does it Matter?
What Credit Score Is Suitable for Apartment Communities?
What to Consider Before Getting an Apartment with a Low Credit Score?
How to Improve Your Bad Credit History?
Important FAQs about Getting Apartments for Bad Credit

Have you always dreamed of a welcoming, warm home that offers you safety and comfort? Before dreaming or making unreasonable decisions, try to think clearly about your first apartment, and don’t forget about your bad credit score. Yes, it can affect your possibility to get an apartment and create your paradise.

A dream home can mean different things to different people, but some common problems can stop you from renting the apartment, and the first is the poor credit history. Most landlords love prospective tenants with good credit scores. It means that they pay rent and their debts on time and have financial literacy not to get into cycles of debt. If you’re not one of them and have a low credit rating, read this article and find out all about getting an apartment with bad credit.

A High Credit Score – Definition

A good credit rating is considered above 700, which is quite nice for most American consumers. However, the typical ratings vary between 300 and 850. There is only the main rule: all the credit ratings below 579 are considered very bad. Meanwhile, all the scores between 580 and 669 are seen as enough to apply for loan products and get professional financial aid. Further, the figures between 740 and 799 are identified as ”very good,” Anything above 800 is perfect for lenders or potential landlords.

These metrics are set by the three major credit bureaus available nowadays in the lending industry. Maybe you know them as Transunion, Equifax, and Experian. Each of these traditional loan companies provides all the needed information about the repayment risk of Americans. Consumers who need rent should remember that every credit record made through these companies may affect the rating of borrowers who already have some errors or debts.

What is FICO & Why Does it Matter?

FICO (or Fair Isaac Company) runs predictive analytics on the credit backgrounds of potential borrowers and tries to foretell the repayment risk or the bankruptcy chances of an applicant. The acronym FICO comes from its CEOs (Bill Fair and Earl Isaac), who founded the credit reporting company in1956. It is based in San Jose, California. It focuses on getting the most accurate information about consumers’ creditworthiness due to a new informational technology based on personal data.

The FICO rating matters a lot for companies that provide lending products, credit cards, house rental, or car leasing services. As the rent payment history and loan usage are essential, FICO expert Ben Williams and FICO Community recommend people keep their credit cards at zero point and decrease the number of loans as much as possible.

What Credit Score Is Suitable for Apartment Communities?

Typically, apartment communities or rental companies look for tenants with at least 600 as a credit score. It seems that rental experts and landlords are assessing your rental application by your creditworthiness which is quite fair. Usually, an average American assumes full responsibility to pay debts and utilities on time. Even if he has financial problems, he borrows money from relatives or friends. This solution is the first after applying for loans. It is what at least 25% of Americans with a less favorable financial situation do. And these Americans have a score of less than 600 and can not apply for an apartment with bad credit.

If you can’t manage the personal finance until the end of the month and you’re not sure if you’ll be able to pay off your debts on time, at least try to monitor your credit background (or rental history) and improve your score as much as possible. Financial experts recommend you also to improve your financial relationship. You should know that errors remain on the credit reports for at least seven years if there are any mistakes. Feel free to speak with credit experts and explain your situation to correct the errors.

What to Consider Before Getting an Apartment with a Low Credit Score?

How to Rent an Apartment with Bad Credit
The more competitive the rental market in your area, the less likely you will find landlords willing to let go of past financial problems. Think about it: homeowners in trendy neighborhoods are often inundated with application forms. If they have the choice between getting someone with good credit history, they don’t need you.

And you should get a lesson from this situation. When your rating is low, your chances of getting approved for an apartment in a good area are lower. Instead, try looking for alternatives: look for another location with no such competitive applicants or landlords. But first, read the tips below and try to follow them accurately:

Learn about your credit report

Every consumer has the right to know about their overall credit score and learn everything about credit history. If you need to assess your chances of getting approved for an apartment, feel free to rely on companies that provide credit score services like NationalCreditReport.com, Equifax.com, or your credit card provider. With any of these options, you’ll get the needed details in several minutes.

Assess your affordability

Once you find out all about your bad score, think twice: “can I afford to make monthly payments for the apartment I want?” or “can I afford to rent an apartment with this overall score?”. Make a list of the pros and cons of renting an apartment in a trendy zone or a cheaper one. Your affordability is essential as long as you intend to pay in monthly installments for the monthly rent. Here are some other questions you should answer:

  • How much rent can I pay for my apartment per month? (at most 30% of your paycheck)?
  • Will a potential landlord accept my credit score?
  • What can I do to improve my financial situation?

Make a direct deposit payment

Trust is not gained overnight. That is why we recommend you choose direct month’s rent payments or a higher security deposit on the landlord’s bank account and not cash. Why? Because it will increase its trust level. Once your paycheck arrives, you can make a direct deposit on the checking account of your future landlord, and that’s it! Cash is not always an excellent way to say that you are an honest tenant. Most individual landlords rely on automatic payments because of the money security provided by the cards, which is a reasoned choice.

Rely on a co-signer

A co-signer will always increase your chances of getting an apartment with a low credit rating. It may be a family member, a friend, or another persona that can be your guarantor in case of your financial crisis. Plus, a co-signer helps you rent an apartment even if your credit report is poor or even no credit background.

Get a no credit check apartment

An apartment with no credit check means that you take it from a private landlord. Usually, private owners don’t have collaborations with apartment communities or other rental companies. They are independent and don’t check your creditworthiness through major credit bureaus. They just review your financial situation slightly to see if you may have missed rent payments. Private property managers are more flexible and ready to make adjustable payment plans for tenants with low credit scores.

Prove your stable income

Your monthly income directly affects your creditworthiness in the eyes of landlords and credit companies. Usually, a prospective landlord needs to see how steady your income is and how truthful your money sources are. Along with the appearance of new professions, there is no need to face an official income. You may be an influencer or freelancer with a flexible income, but it should be steady and measurable. Usually, landlords require a pay stub, bank statements, security deposit, or other documents that prove your monthly and annual income. Just provide this information and go ahead with renting your dream apartment.

How to Improve Your Bad Credit History?

Don’t spend all your credit card money. The full use of credit indicates risky behavior from landlords’ perspectives and can lead to lower credit scores. Therefore, it is advisable to use a maximum of 40% of the total loan amount to develop a restrained behavior and improve your FICO score.

Make the payment on time if you have outstanding loans or rents. Any delay in paying rent or the installments can affect your credit score. If you are already late in paying installments, it is enough to start paying again on time, and your scoring will improve.

Try to repay the loan arrears. The amounts owed are one of the indicators with the greatest impact on your current credit score. Therefore, if you are in arrears, it is vital to pay off your existing debts.

Establish a balance between income and expenses. Assess your income and expenses so that you pay your regular payments without much pressure. You should close some of your current loans or negotiate with the lender to increase the repayment period. Your score looks good when the rates you have to pay monthly represent less than 30% of your income.

We hope our article has helped you assess your chances of renting an apartment even if you have a less-than-perfect financial history. Before making the big decision, think twice, take all the risks, and follow our tips. In case you need financial help, 1FirtCashAdvance is here to provide payday loans (up to $1,000) or installment loans (up to $5,000). Want a personalized quote? Drop us a line, and let’s talk about your financial crisis.

Important FAQs about Getting Apartments for Bad Credit

  1. Can I get an apartment if I have a 500 credit rating?

    Yes, but you should provide some additional information about your current finances. Plus, you’ll need to have a cosigner to make sure your low credit score will be accepted. If you can rely on these options and can co-sign, try to improve your credit rating as soon as possible. It is worthy to have a good credit score as soon as you are an honest tenant.

  2. How can you get approval for an apartment with a poor credit report?

    You may get approved for rent if you follow these simple tips: get letters of recommendation from previous landlords, pay stubs, other documents supporting your financial security, consider a cosigner or guarantor, get a roommate, improve your poor credit score.

  3. Can you get an apartment with a 450 credit score?

    As said before, you may get an apartment with bad credit, even if it is 450. Consider following our tips, and you’ll get approved for an apartment that doesn’t check your credit background or rental history.

  4. How do I find an apartment with no hard credit checks?

    Rely on a property owner that doesn’t provide apartment rent through property companies. They are more flexible and ready to help you get an apartment even with your poor credit history.

  5. Can an apartment community deny you with bad credit?

    Yes, that is why we recommend you improve your credit score, get a cosigner or find a no credit check apartment that will help you get the apartment with bad credit. These options are the best alternatives to renting an apartment with a low credit score.

Kerry Vetter is a consumer finance expert and writer, who has been engaged in creating finance-related content for more than ten years. Her expertise is approved by obtaining a Bachelor of Science in Finance from Boston College, as well as receiving three major certificates as a professional advisor and counselor.  At the moment, Kerry is an author of multiple educational articles and insights that have been created in order to increase and develop financial literacy and responsible borrowing among US citizens. Her expert relevant savings advice has helped a lot of people overcome their financial issues and find out more about principles of smart spending, the right investment decisions, and budgeting.  You can read more about Kerry’s professional background here.

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