Renting an apartment with bad credit can be a challenge, but it is not impossible. With some strategic planning and aggressive action, you can still get into the rental home you want.
Credit Scores: A Brief Overview
First of all, let’s talk about credit scores. In a previous post, we discussed the various factors that impact your credit score. Credit scores are ranked from excellent to bad. Excellent is a credit score around 720 or higher. Poor credit is defined as a score below 629. The lowest credit score is 300. The higher your score, the better deal you will receive when applying for financing.
Everyone is looking at Your Credit Score
But it is not only lenders or credit card companies that look at your credit score. Landlords also look at your credit score to determine what kind of a tenant you are going to be. If it looks like you are behind on your payments, or in default, it may give them cause to worry that you will not be able to make the rent payments. Employers also pull your credit history to obtain a prediction of the kind of employee you will be.
Therefore, your credit score is very important. It not only gives a picture of your creditworthiness but also of your character. If you have bad credit one of your primary objectives needs to be improving your score. Renting an apartment with bad credit can be overcome, but you don’t want to stay stuck in this cycle of overcoming the obstacles created by a bad credit history.
Renting an Apartment with Bad Credit: Strategies for Success
Okay, so in the meantime, while you are working on improving your credit score, you still need to rent a place. Here are some strategies to help you succeed.
Rent from Private Landlords or Small Properties. Large rental communities employ corporate management offices, who utilize a very sophisticated and impersonal system for vetting prospective tenants. You will not have the same opportunity to explain your “story” to a corporate office. Try to find a rental home that suits you from a private landlord or in a small rental home project. Private homes, for instance, as opposed to apartments, offer better opportunities for a more low-key approach to tenant vetting.
Come Prepared. If you have bad credit, don’t wait for your prospective landlord to pull your report and find the negative issues. As soon as you see the apartment you want, sit down and discuss the problems you have with your credit history. Come prepared with good explanations and a roadmap for improvement.
Bring References. What you need to overcome is the impression that you are of bad character, something that your credit score may say about you. Most Americans are struggling to stay financially afloat, and their credit score may not necessarily be an accurate reflection of their character. Come to your meeting armed with references from employers, previous landlords, and other professionals who can attest to your good character. This can go a long way toward neutralizing your bad credit score.
Offer More Cash Upfront. If you can afford it, offer to pay more of the rent upfront than is normally required. For instance, typically landlords require the first and last month’s rent payments in advance. Plus also they ask for a security deposit. If you can do it, offer to pay an additional month or two in advance. Be sure you really love the place though, because if you leave early, you may not get this back. You can also offer to pay your rent via automatic payments. The landlord may be more assured if he is not relying on monthly rental checks.
Bring a Co-Signer. When you are renting an apartment with bad credit, having a co-signer can make a big difference. If you have a family member or friend who has excellent credit, they would sign the lease along with you and be responsible should you miss rent payments. Both of you need to keep it in mind, though, that this is the same as co-signing on a loan—if you fail to make the rent payments, your co-signer is legally liable for any debt you have accumulated.
Bring Your Bank Statements. It could be your bad credit score is only a reflection of recent financial difficulties. Perhaps in the last year, you lost your job or were faced with unexpected medical bills or other emergencies. Most Americans are in this boat. If you bring your prior bank statements with you, the landlord can see that your financial woes are recent, that you had a track record of good credit behavior. If you can also demonstrate that you are on the path to recovery, the landlord may be inclined to give you a chance.
