My Credit Scores Not High Enough
You may be able to find ways around a low score, even if your future landlords a stickler:
- Get a friend or relation with good credit to co-sign your lease but it will have to be someone who loves you because shell be putting her own credit score on the line if you default
- Pay several months rent upfront, if you can
- Give a good reason for your low score Some people have low scores simply because theyre young and are yet to build up a track record, or because they havent borrowed anything for several years
Another option is simply to improve your score. You can probably move your score up by a worthwhile amount within a few months by reducing balances and paying on time.
Tips For Renting An Apartment With Bad Credit
If you don’t have time to improve your credit score for renting an apartment, here are a few tactics you can also try to persuade your potential landlord to rent to you.
First Steps In The Renter Pre
Start by looking at credit scores. What exactly makes up a persons credit score? Many people liken credit scores to an adult version of the permanent record that followed students throughout their careers in school. Its a bit more complex in reality. Financial history, such as outstanding debt and current account balances, makes up a good portion of a persons credit score. The number also reflects a persons timeliness in paying back creditors a few delinquent payments or an abundance of credit cards in a persons name can hurt a credit score.
But a credit score isnt always the most accurate means to judge a potential renters financial solvency. Events such as divorce and identity theft may negatively skew a persons credit score. And relatively young renters may not have enough financial history to establish a strong credit score. Landlords should consider these circumstances when they evaluate an applicants credit score.
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Why Do You Need A Good Credit Score To Rent An Apartment
Nick Meyer, a certified financial professional and financial influencer, shared the relationship between a good credit score and the apartment application process.
“Your credit score acts as your financial report card: it’s a number that tells banks, landlords, and even employers how likely you are to pay off your debts. The lower this number is, the less likely landlords are to approve your rental applications.”
So what should you do if you have a low score?
How Credit Scores Are Created
You already know about the factors used to create a credit score:
- Payment history
- Recent credit changes
There are different credit scoring models used to take all of these factors and morph them into a single, three-digit credit score. Depending on what type of lender is checking the credit score, the best scoring model may vary.
It is normal for an individuals score to vary between credit bureaus because each scoring model puts the weight on something different. This is why some types of scoring models are better than others for loans, while credit card companies may prefer a different model.
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Tips For Improving Your Credit Score
- Pay off any outstanding debt when possible
- Make the minimum payments on your credit cards every month and on time
- Turn on automatic payments so that you dont need to remember to make payments on time
- Limit spending as much as possible
- Increase your credit limit
- Ask your property manager and utility company to report your payments to major credit bureaus
- Consolidate any debt into a lower interest financing option through a credit union
- Do not open any new cards without reducing the balance on your current credit cards
- Clear up any inaccuracies on your credit report
Renting with a low credit score can be overwhelming. While no-credit-check apartments are an option, you can take steps to show any potential property manager that you have the financial responsibility to be a valuable renter.
Focus On Paying Off Debt
Another factor that can impact your credit, even if youre making regular payments, is a high debt ratio. It might not be possible to pay off a significant chunk of your student loans before getting a new apartment, but paying down a credit card or a line of credit can significantly improve your overall credit score.
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Its Not Just When Youre Renting
What credit score do you need to rent an apartment? Consider that even when youre not about to rent or a buy a home.
We tend to think more about credit scores when were facing a big financial event: renting a home or applying for a mortgage, credit card or loan. Its good if you can keep your score front and center whenever you make a purchase or payment.
Thats because a low score can cost you serious amounts of money over your lifetime. One estimate reckons the average cash difference between living a life with excellent credit and one with poor credit is $200,000.
And the effect of low credit can dog you in other ways: by closing off options and opportunities that are open to others. So dont forget your score, even when you dont immediately need it.
Takeaways On Getting An Apartment With Bad Credit
Getting approved to rent an apartment often requires a credit check. If you have a credit score under 620, it could prove challenging to rent an apartment. And if you have a score that falls into the poor or bad range , it could be even more difficult.
In cases of poor or bad credit, locating a suitable apartment that you can rent without a credit check would be ideal. However, if you cant, try to take the time to clean up your credit as much as possible before applying to rent an apartment. Then, be prepared to submit proof of income, letters of recommendation, a larger security deposit and prepaid rent to increase your chances of being approved.
David Navarro contributed to the reporting for this article.
Our in-house research team and on-site financial experts work together to create content thats accurate, impartial, and up to date. We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct. You can learn more about GOBankingRates processes and standards in our editorial policy.
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Are Credit Checks For Luxury Apartments Hard Or Soft Inquiries
Youll need to ask a specific landlord or leasing company this because there is no industry standard.
That said, most apartment credit checks tend to be soft inquiries, meaning the check will not negatively impact your credit score.
Still, its important to verify this upfront because too many hard inquiries in a short period of time could knock your credit score down. If that happens, you could have a harder time getting your dream apartment.
What Is A Good Credit Score For Renting An Apartment
Like any good financial writer and blogger, I love talking about money. Everything interests me when it comes to personal finances. If I know something, I enjoy sharing my knowledge on the the subject. If I don’t know about a particular topic, I want to find someone who does understand it so they can teach me.
While most people consider conversations around money a taboo topic, my closest friends have accepted I’m just weird when it comes to my interests. For the most part, they humor me when I want to yap about finance.
That’s what happened one evening a few years ago when a friend and I got into a discussion about credit. My friend — like many Millennials — did not have a credit card and didn’t want one. But this same friend did want to rent out their own apartment soon.
“But you’ll need a credit history to rent an apartment!” I said. “Most companies that manage rental properties, and even individual landlords, check your credit score before allowing you to sign a lease.”
My friend scoffed. “Cash is king! I don’t need credit because I’m responsible with my money,” they countered.
Here’s the thing: A credit score can and does affect your situation when you want to rent an apartment. A bad credit score may not immediately disqualify you from renting or cause your rental application to hit the rejection pile. But landlords and leasing offices will run a credit check with your application and the results can influence what happens next.
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How To Check Your Credit Score
Avoiding any delays or obstacles during the rental process or any major financial purchase in the future means keeping a close eye on your credit score. Even if a major purchase or rental isnt on the horizon, catching any mistakes early or making a plan to build your score back up after a missed payment will save you a ton of time and heartache later on.
You can get a free copy of your credit report once per year from each of the three major credit bureaus at Annualcreditreport.com. This will give you an idea of whether or not there are any errors on your credit report that could be dragging down your score, however, your credit score wont be listed on your report.
Many of the top rewards credit cards offer a free FICO score on your monthly credit card statement. Capital Ones program and Chases are also available to all consumers whether youre a customer or not, and both let you see a version of your TransUnion credit score.
Its also important to note that checking your credit score wont impact it. When youre applying for a loan or a new line of credit, its typically referred to as a hard inquiry, and will likely bring down your score. When youre simply checking your own credit score or a lender checks your score to send you a pre-approved credit card offer, this is known as a soft inquiry.
Prove You Can Afford The Rent
A landlords chief concern is that you can pay rent. There likely is a mortgage on the property that needs to be paid. A landlord might be more willing to rent to you if you include pay stubs, electronic deposit records or other written evidence of income for the past two years that shows your ability to pay the rent.
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Average Tenant Credit Score Ranges
What is the average number you can expect to see when checking into what should be considered an acceptable credit score for renting?
Here at RentPrep, we run a lot of for the landlords who use our services. This gives us some insight into what you might see from renters. We are not the only ones who have insight into acceptable credit scores, however.
These are some of the most popular numbers used as a measure of what is an average credit score for tenants in America.
This is the exact average score we have seen in one year of data among all of the reports weve completed. This means if the score is lower than 649, it should be at least a little concerning. According to Experian, an acceptable credit score to rent an apartment is around 638.
These numbers are based on the data we have here at RentPrep. We run thousands of credit checks every month and this is a result of our findings. Understand that this is not based on all renters, but it is based on renters of landlords who run background checks.
According to an article from ValuePenguin, the average credit score of Americans in a 2021 report was 688 for the Vantage scoring model and 711 for a FICO model. Keep in mind that this is not industry-specific it takes into account everybody and not just renters. Renters statistically have a lower credit score than homeowners.
Can You Rent An Apartment With A 550 Credit Score
In short, yes! A credit score of 500 is low, but it’s not insurmountable. It would be best if you planned some extra time for your apartment hunt with scores this low, but you can still rent an apartment. … If you prefer to find a no credit check apartment, your best bet is to go with a private landlord.
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Minimum Credit Score To Rent An Apartment: Is There One
SimpleMoneyLyfe » Minimum Credit Score to Rent an Apartment: Is There One?
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Everyone needs a place to live, but it can be tough to qualify for apartment rental if your is particularly low.
Since apartment rental requirements vary from place to place, it may be wise to learn whether theres a minimum credit score to rent an apartment. Lets break this topic down in detail.
How Can I Check My Credit Score
Its essential to check your credit score regularly and stay on top of it. See a list of free and paid credit score providers.
When you want to apply for an apartment is not the time to discover that you have an error or outstanding balance on your report.
The landlord will not be waiting around for you to correct the error or pay off a collection that will negatively reflect on you.
Remember that the more apartments you apply for, the more times your credit will be pulled, and this will adversely affect your score.
You are allowed a full credit report free once a year, but nowadays, you can readily check your FICO score on your credit card profile online.
Another great way to monitor your credit is to sign up for third-party services like Credit Karma or Credit Sesame, which will show you individual scores from credit agencies like Equifax and Transunion.
These scores are more approximate but should give you a ballpark figure of what your credit looks like. If you find your credit score to be poor, read this guide on how to improve it.
Recommended Reading: Creditsesame.com Free Credit Score
Do You Need Credit To Rent An Apartment
Most apartment applicants are required to have at least a 650 credit score to rent an apartment.
However, young adults, those with no credit history, those with low credit scores, or victims of identity theft may not meet the necessary credit score needed to rent an apartment.
No credit check apartments allow applicants to rent with a low credit score or without having an established credit history.
Include Positive References In Your Application
Reference letters can go a long way if you have a rental history. Positive testimonials from past property managers will help prospective property managers understand that you can pay rent on time, be a good tenant, and keep the apartment in good condition. If you dont have a rental history when choosing your rental reference, select someone who can speak positively about you, such as an employer.
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Good Versus Bad Credit Score
The credit score model designed by the Fair Isaac Corporation is known as FICO, and it is the most commonly used credit scoring system used in the USA. Your credit score is based on your credit history, which can be influenced by various factors such as the number of bank accounts you own, the amount of debt you have, and how timely you repay debt.
While it can be a bit complicated to understand, you can boil down your credit score into a simple principle: if you repay loans on time and you donât take out more debt than what you earn, youâll likely have a good credit score.
The FICO scoring system is numerical and ranges from 300 to 850. Here is the complete FICO scoring system at a glance:
In terms of renting an apartment, property owners will generally look for applicants who have a âgoodâ rating or better. While you can still get approved if you have a âFairâ rating, you should expect that your landlord will ask for more assurance towards your financial capacity. You might be asked for references from previous landlords or a certificate of employment.
There are many reasons why you could have a bad credit score, such as defaulting on loans or filing for bankruptcy. If you have been served a lawsuit in the past for failing to pay rent, this can also lower your credit score significantly.