7 Tips to Rent an Apartment With Bad Credit

A bad credit score can limit your access to credit cards, loans, and sometimes, even job opportunities. But what you may not know is that a poor credit score can also minimize your housing options. 

Property management companies and individual landlords may require prospective tenants to have a minimum credit score to qualify. According to credit bureau Experian, FICO scores of 669 or lower are considered subprime borrowers. Although it might be more challenging to secure your dream apartment with a low credit score, it’s not impossible.

Here are a few ways to help you get approved for your next apartment if you have bad credit.

1. Double-check your credit report

It doesn’t happen often, but errors can come up on your credit report. These errors can result from a case of mistaken identity, for example. If you share the same name with your father, his credit mishaps may mistakenly get onto your credit history. 

Before submitting a rental application, order your free report on annualcreditreport.com. You’re entitled to a complimentary credit report from all three credit bureaus — Experian, Equifax, and TransUnion — every 12 months. If you spot an error, submit a written dispute to the credit reporting agency for correction, immediately.

2. Pay more upfront

It’s common practice for the initial move-in cost to consist of a security deposit up to the amount of one month’s rent, plus the full rent for your first month. If you’re struggling with getting approved for an apartment due to a poor credit score, you may need to offer more money upfront.

For example, offering to pay for your second month’s rent in advance can help put a landlord at ease. The security of knowing your payment is covered for a longer runway of time may be enough for a landlord to give your application serious consideration.

3. Don’t apply to apartments that require a credit check

Although many professionally operated rental properties require a credit check, some landlords don’t require one as part of their screening process. Limiting your search to no-credit-check apartments can help you avoid the hassle of a denied application due to your credit.

Also, if your credit is already in a bad spot, applying for multiple apartment units that require a hard credit inquiry lowers your score even more, temporarily. New credit inquiries, such as those conducted by landlords and property management companies, can affect 10% of your FICO score’s calculation. 

The reality is that you’re casting a smaller net by exclusively looking at housing that doesn’t require a credit check, but it’ll save you some grief and a few points on your score.

4. Flaunt a high income

A poor score can be an indication of undesirable borrowing habits, but this isn’t always the reason for a low credit score. For example, you simply may be fresh out of college with a lean credit profile. 

Generally, landlords prefer to see that your monthly income is at least 2-3 times more than the rent. If you’re in a lucrative career and are earning a high salary, present a few months of pay stubs as proof that your high pay is consistent and well above this mark.

5. Enroll in automatic payments

Making rent collection as easy for your future landlord as possible is one way to gain their favor. If they offer tenants optional automatic rent deposits, volunteer to sign-up so your monthly rent is automatically pulled from your bank account.

For landlords who don’t already have an automatic payment system in place, Trulia offers a rent pay hub to make the process easy for landlords and tenants.

6. Put a co-signer on the lease

Asking a close relative to be a co-signer on your apartment lease can be a lot to ask. If you have a willing party who has strong credit, however, negotiating a co-signer option with a landlord can help you lock-in your next apartment. 

Keep in mind that if for any reason you’re unable to make rental payments, your co-signer is on the hook for the amount that’s due. This arrangement can cause a strain in the relationship so tread carefully if you’re not confident you can hold your end of the bargain.

7. Get a roommate with strong credit

If you can’t find someone who’s willing to co-sign your lease, finding a roommate with good credit can be an option. Some landlords require that all tenants living in the unit undergo a credit check, but not all landlords have this expectation.

If you find an apartment you and your roommate like, and only one credit check is required, you can have the landlord pull your roommate’s stronger credit report. Again, this approach depends on the landlord or property management’s background requirements, but it’s worth a shot if you’re renting with bad credit.

Want to fix your credit long-term? Reach out to a financial coach today to learn how to raise your credit score and maintain it for good.