How to Rent an Apartment When Your Credit Score is Far from Stellar
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Understand Your Credit HistoryWhen a landlord checks a prospective tenant’s credit, they look at more than just the actual credit score. In fact, they’ll be looking for things such as tax liens, past evictions, and even utility bills that have been turned over to collection agencies. According to most real estate experts, a lower credit score isn’t quite as damning as having a bad history of poor credit and recurrent collections activity. Fortunately, federal law gives you the right to review your credit history for free at least once a year. Therefore, you should take advantage of this and review your credit history to help you avoid any surprises when applying to apartments. This helps you prepare to answer any questions that a landlord might have. And, if you find any mistakes in your history, you also have the right to contact the credit reporting agency to have the mistake corrected.
Have Proof of IncomeOne of the most important factors that landlords will look at is whether you actually have the money to pay your rent on time. Therefore, we recommend collecting any information you can about your income, which includes recent pay stubs, as well as your current employer’s contact information. Also, if you’re paychecks are paid through direct deposit, you might want to get a printout of your most recent bank statement to prove that you have a steady stream of income. It’s also not a bad idea to provide a copy of your most recent tax return to help prove that you’ve had stable work in the past.
Avoid Big LandlordsLarge apartment buildings tend to have a standardized process for selecting and approving their tenants. Unfortunately, this limits the manager’s ability to be able to make any exceptions when reviewing your tenant application. With that in mind, we recommend you stick to viewing apartments that are owned by individual landlords or smaller property managers. These types of landlords are often more willing to make exceptions, so long as you can prove that you have a steady income. In some cases, an individual landlord might not even bother with checking your credit score.
Offer an IncentiveOne excellent way to reassure your prospective landlord that you’re a worthy tenant is to try offering them some sort of incentive. This can be done by either offering a larger deposit than what they’ve asked for or by volunteering to pay an extra month or two’s rent up front. Making these advanced payments will significantly reduce the landlord’s risk and makes them feel much more confident that you’re worth approving, despite your poor credit score.
Get a Letter of RecommendationProviding your prospective landlord with a letter of recommendation is an excellent way to attest to your own personal character and ability to properly manage your finances. This can go a long way in reassuring them that you’re worth approving, especially when your credit history isn’t the best. Just remember that a letter of recommendation needs to be relevant and is best if it comes from a previous landlord. However, getting one from your bank or employer can also be an appropriate way to prove that you’re, in fact, able to pay your rent every month.
Write a Personal StatementIn some cases, you might be able to convince a potential landlord to approve your application if you can clearly explain your situation. For this, we recommend writing a personal statement explaining why your credit score is what it is. Explain this openly and honestly, but don’t forget to include the steps that you’ve taken to help re-establish your credit problems. At the end of the letter, it’s also a good idea to explain why you believe they can count on you to make your rent payments on time.
Looking to Rent with Bad Credit?Just because you have a poor credit history, doesn’t mean that it’s impossible to rent an apartment. This simply means that you just need to be a bit more proactive in providing proof of income to reassure potential landlords that you’re worth renting to. In the end, if you can prove that you’re a worthy tenant by following these tips outlined above, you should have no problem in getting the apartment that you’ve always dreamed of.
MarketerEric Worral has owned and managed rentals for over 9 years. Currently, he does marketing for RentPrep’s tenant screening service for landlords and property managers. He’s also the co-host of the “RentPrep for Landlords” podcast where he shares tips and insights on managing your rental properties.
Equal Housing Opportunity Rental providers will not refuse to rent a rental unit to a person because the person will provide the rental payment, in whole or in part, through a voucher for rental housing assistance provided by the District or federal government.