I want to start this article and podcast by mentioning credit is king in the United States Of America. Without a good credit history, you are pretty much limited to how much access you have to some financial products and services. When it comes to renting with a low credit score, it may be a deal breaker for some apartments. But, it does not mean there are not apartments that accept low credit.
So, how are you supposed to rent with bad credit?
Well, it is true apartments do a credit background check on you. However, they are more interested in your ability to consistently pay rent monthly. This is where you can prove to them of this capacity. You have to present yourself as a reliable person, since your credit history says otherwise.
Will Apartment Rent To You With Bad Credit?
Apartments want to make sure you can handle your rent monthly. This is why they go through the length of running a credit check on you. They are not just looking at your credit score. They want to make sure you are not known to owe debts.
So, here is how you could convince them otherwise.
1. Use A Cosigner
It is hard to rent with a low credit score, but a cosigner makes it easy. What a cosigner does, is to sign the lease on your behalf. Personally, I will not recommend anyone doing this for other people, unless they are reliable people. This is because your cosigner could screw up their credit, when you find it difficult paying rent.
But, not everyone is unreliable.
As the good and hard young working class adult you are, you can get someone who knows close to home to advocate on your behalf. Not only advocating, but also signing the lease on your behalf. Your cosigner could be your parents, friends or someone else with a good credit history and score.
In a situation where you have no one to help you cosign, you can use a third party guarantor company. There are third party guarantor’s companies out there, who make renting apartments with low credit easy. They can help you sign an apartment lease. You have to pay a fee for this service though.
2. Offer To Pay A Higher Security Deposit
You can rent an apartment with low credit score. This is as long as you are able to persuade the apartment to trust your ability to make rent. To be able to do it, you can offer to pay a higher than the usual security deposit.
This is especially, when you have a bad credit but good rental history.
Bad things happen sometimes, which could ruin our credit. It does not necessarily mean we are bad people. Am I right?
Therefore, offering to pay a higher security deposit to show commitment is a great way of persuading a leasing office. I will not lie to you, it worked in my case during my first apartment rental. The best part of it was my security deposit was about $500 more than the usual.
3. Get A Roommate
On Is It Smarter To Get Roommates Or Just Live Alone episode, I talked about how to go about considering getting an apartment with a roommate or living alone. I would like you to listen to the episode, prior to making a decision. Having a roommate is the kind of the decision you have to be sure of.
Given the current situation, you can get a roommate with a good credit history for renting an apartment. His or her credit can get you two approved for an apartment. You just need to make sure you vent the right person. It is one of the effective and practical ways of renting with a low credit score.
4. Pay A few Months Of Rent Upfront
Renters with bad credit history can offset it, by offering to pay a few months of rent upfront. This works when you have a job which pays twice or thrice the rent. If you have a good rental history on top of that, it will prove your ability to pay rent without a doubt whatsoever.
You see all these apartments out here?
They are there to make money. As long as a renter has proof of financial ability, most of these apartments will rent to him or her. A good rental history on top of that is just a cherry on top. Your good rental history could help offset your credit report.
If you got the savings, I say try to offer three months of rent. Then, print out six months of paystubs and take them with you. You are going to use them as evidence to negotiate your way renting an apartment with bad credit score.
5. Build Your Credit Before Applying For An Apartment
I have always advocated for building your credit as a young working class adult. It takes at least six months to build a fair or good credit score. If you have the time, I say you do it.
This is because it eliminates the hassle of you trying to rent a house with a bad credit. In as much as apartments may consider you after what I had said earlier, it is not a certainty. What do I mean by this, my dear reader?
You have to understand there is always a queue of people applying for an apartment unit. If everyone else on that queue has a better income, rental history and credit than you, they will get it. Hence, why you need a good credit history prior to renting an apartment. You can read Building Credit For the First Time: What To Know to learn how to go about it.
Can You Get An Apartment Without Credit?
Now, this is a severe situation of renting with a bad credit. You need a credit history for renting an apartment. It is going to be hard to get an apartment without credit. This is because there is no record of you ever handling a financial responsibility. It is what a credit history shows.
Do not get me wrong.
There are some apartments out there who will rent to you regardless. This is especially, when you offer to pay months of rent upfront. Or, establish to them that you make a lot to offset the history of no credit.
Personally, I recommend building your credit before you attempt to rent. You can read my article- How To Get Above 750 Credit Score. It will help you dig yourself out of a poor credit score. This is because it is actually hard to rent with a low credit score, especially when it is a poor credit score. It is even worse when you do not have any credit history.
What Is the Lowest Credit Score A Landlord Will Accept?
Can you rent with a 500 credit score, my good reader?
The lowest credit score a landlord will accept is fair range. Anything lower than that, you risk either not getting approved for an apartment or you getting approved with a higher than usual security deposit. This is because the apartment sees you as a risk.
I think it boils down to you having a good rental history and ability to pay rent. With a previous good rental history, apartments look at your ability to pay before making a decision about renting to you. If you make three to four times the rent monthly, your low credit score will not matter.
Do you know why?
Apartments want to fill up those empty units of theirs. Also, they are looking to make money. A person could have an excellent credit score , but if he or she struggles to make rent, apartments do not consider such a person. So there- you have a chance!
To learn more about how your credit score affects renting, you can listen to What Credit Score Do You Need For An Apartment episode. I discussed this issue in a great detail. Be sure to share with people who need it.
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